Winning in the investment field is as much about preserving capital in bad markets as it is about making money in good markets. We are in business to conservatively grow capital entrusted to us – to earn reasonable returns for the portfolios over a reasonable time horizon. By and large, we don’t think in terms of the calendar when considering investments, and so we don’t necessarily think of calendar years as appropriate grading periods. In our view, investment performance for the portfolio over shorter time horizons, even sometimes those of several years duration, is something of a random event. We have found that the timing by which an investment works out (or doesn’t) does not conform itself to the calendar. The time periods we refer to as months or quarters or years are useful for making sense of life, but are generally uncorrelated to the progress of businesses or the fruition of investments ideas. In fact, in all investing decisions, the issue is one of weighing risks and potential returns: balancing short term challenges versus long term opportunities, reasonable concerns versus weak logic or conventional wisdom, upside potential versus downside risk, current stock price versus intrinsic value of the underlying business in question.
At Kothar Capital, we believe in working hard to serve the long-term best interests of our clients through strong analysis and prudent decision making. We benchmark our own performance (both in terms of relative and absolute returns) over a three to five year period cycle. Shorter periods tend to be misleading or just random. Good performance over an entire cycle usually results from some underlying competency or skill employed by the manager. Our goal for you and our other valued clients is the same as our goal for our own money - to achieve an excellent compounding of capital over long periods of time without taking undue risks of permanent capital losses.
In light of the above, we feel that is very useful and important that we both track and report our past performance. We welcome clients to use this information in their overall assessment of our approach to intelligent investing.
Upon request, we can share the specifics of our past performance with potential clients. While past is no guarantee of future performance, our track record indicates that we deliver outstanding money management services since we outperformed the vast majority (well in excess of 90%) of other managers over our measurement periods and to boot during one of the most difficult market periods in recent memory.