Equity Analysis & Selection

KIG takes a disciplined approach to investing using the business owner perspective and applying the margin of safety principle.

Business Owner Perspective

• We consider investments in common stocks as units of ownership in a business. We don't, therefore, regard ourselves as just traders of pieces of paper, but rather as part owners of tangible businesses.
• We focus on companies which we believe have exceptional business models, superior financial strength, and strong, sustainable competitive positions.

Margin of Safety

• The "margin of safety" principle is a cornerstone of our investment philosophy. While we strive to maximize return, we believe that the primary and overriding investment criterion should be safety of principal with a focus on minimizing permanent loss of capital.
• We focus our analysis on uncovering companies selling at a significant discount to our estimate of underlying intrinsic value.
• Equities purchased at substantial reductions from intrinsic worth help protect capital from loss while offering significant appreciation potential as the market recognizes the company's economic value.

Disciplined Action

• Our approach is focused on maximizing long-term net worth and not necessarily on generating short-term performance. Market movements are important to us only in a practical sense, as they alternately create low price levels at which we can buy and high price levels at which we can sell.
• We never forget that we are managing your money. This reinforces our commitment to our philosophy and enables us to avoid undisciplined investment decisions.
• We apply our investment discipline consistently, regardless of short-term market events. We seek to allocate investment capital on the basis of justifiable premises, valid logic and hard evidence - not popularity or emotion.

Equity Research

Our equity research applies a thorough process to screen, track, evaluate, and manage your portfolio.

Qualitative Assessment

• Market leaders with strong competitive positions.
• Stable products and economies of scale and/or scope.
• Low capital requirements.
• Experienced and competent management with ownership stakes.

Quantitative Assessment

• High returns on capital.
• High correlation between earnings and cash flow.
• Low financial risk.
• Valuations based on discounted cash flow models.