Here at Kestrel, we have a disciplined investment framework from which we assess the current state of play.
We call this our S.I.M.P.L.E. Analysis.
S.I.M.P.L.E. looks at Sentiment, Interest Rates, Macro, Price, Leadership and Earnings to see where markets currently stand.
As legendary investor Howard Marks says, Investors need to strike a balance between offence and defence in the trade off between (i) the hope of making money and (ii) the quest to avoid losing money.
Investing is not a binary, “all in” or “all out”, decision. It is about striking a balance between the two.
“We may never know where we’re going, but we’d better have a good idea where we are. That is, even if we can’t predict the timing and extent of cyclical fluctuations, it’s essential that we strive to ascertain where we stand in cyclical terms and act accordingly”. Howard Marks Letter “It Is What It Is” March 2006
This is exactly what we seek to do with our S.I.M.P.L.E. Analysis