BLS Capital are active long-term investors. This has the effect that we only invest in companies, which we feel safe investing in. We do not invest based upon which companies are currently trending, often mentioned in the media or based upon the composition of a benchmark.
When we invest in the shares of a company, it is principally to be shareholders for eternity, and as investors we see ourselves as long-term co-owners of the companies – just as we consider investors in BLS Invest as our co-investors.
We cannot predict future economic developments, and we will not try to do so either. How rational or less rational investors value individual companies or equity markets in general is out of our control. Thus, we do not have a position on the direction of equity markets in general in the short or medium term.
Trust and understanding
What we do is invest in companies we understand and trust. Companies we believe have an attractive business model, competent management and the ability to increase value creation for us as shareholders. This is founded on the thought, that the long-term genuine value-creating companies will also become more valuable.
Consequently, we only invest in companies we trust. We will not invest in equities solely due to the popularity of certain companies or sectors. This might create significant gains for the short-term investor, but we strongly believe that we can create better and more stable long-term returns by only investing in what we truly understand.
Thinking long term
However, we are fully aware that our returns in the short and medium term can deviate from general market returns, both positively and negatively. However, over time we believe that our investment philosophy creates the best foundation for attractive, positive long-term returns.
Our investment strategy is focused on absolute returns. Contrary to the popular relative investment strategy, which is focused on beating the market within a fairly short time horizon, the absolute strategy focuses on creating positive returns. The relative return strategy might thus succeed, despite negative returns – as long as this is higher than the comparable benchmark. Absolute investing only succeeds when the return is positive.
This strategy further means that it is more attractive for us to increase our holdings in companies, when their share price is low, as this provides us with the opportunity to buy stakes in attractive companies at low prices.