Our Investing Rules
Water Oaks Capital has developed its investing rules principally from the long-term study of renowned value investors Benjamin Graham and Warren Buffett. Our principal investing rules all focus on one fundamental goal: to acquire businesses and assets below their intrinsic value.
- Margin of Safety – Assets trade at odds of intrinsic value over long periods of time. Always buy well below intrinsic value to ensure margin of safety.
- Inner Scorecard – “You cannot do well in investing unless you think independently. You are neither right nor wrong because people agree with you. You are right because facts and reasoning are right.” –Warren Buffett
- Focus – Imagine that you have a card with 20 investment “punches” in a lifetime. Every investment decision uses one punch. Resist the temptation to dabble.
- Leverage – Capital preservation is our primary goal. Always question whether financial leverage or a certain level of financial leverage creates unnecessary risk.