Investment Philosophy

Fundamentals Driven. Ultimately, money made in the stock market originates from two sources only: value created by a company or cash in other investors’ pockets. River Capital has zero interest in zero-sum games. We invest, not trade. 

Long-Term Perspective. Relative Valuation Metrics, based on a few years' earnings or book value, do not tell much of the whole picture. The textbook DCF model, projecting 10 years' free cash flows, captures only about 30% of the enterprise value. We look much further into the future to evaluate a company's intrinsic value. 

Sophisticated Research Framework. River Capital focuses on the small portion of listed companies that are, or will be, consistently delivering outstanding returns. We apply an R-C-L approach to evaluate the potential of a candidate:

• Room for value creation

• Competitiveness

• Leadership

High Margin of Safety. Instead of buying one dollar of value at fifty cents, River Capital buys five dollars of value at fifty cents. In other words, we expect our portfolio company to grow into an industry leader and its enterprise value to extend tenfold or more.