Long-term guidance

“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently”, Warren Buffett.

1) Our philosophy 

We apply value investing philosophy and we are long-term investors.

At Lema Capital, we are deeply inspired by the timeless principles of Warren Buffett and Charlie Munger. Their teachings on disciplined value investing, long-term thinking and rational decision-making form the bedrock of our approach. Beyond investment strategies, we embrace their emphasis on strong work ethics, relentless curiosity and unwavering honesty as essential to success. We also share their belief in philanthropy, reflecting a commitment to giving back and the principle that true achievement comes from deserving what you seek through integrity and effort. These values guide us in our pursuit of sustainable wealth creation for our clients.

2) Skin in the game

The Portfolio Manager has all his family's financial assets in the Lema equity portfolio.

3) Our way to communicate with the clients

We believe in transparency and sharing our perspective. Our investors and clients can gain insight into our investment philosophy and thought process by following our LinkedIn posts. There, we regularly share our views on markets, industries, and the principles that guide our decisions, offering a window into how we approach value creation and risk management.

4) Quality over quantity

Excellence requires focus. Our Global Equity and LatAm strategies are each guided by a single decision-maker, allowing them to concentrate exclusively on their core mandates. We operate on the conviction that clients receive superior results when their manager is dedicated to one clear vision.

Below are some of our investment principles:

1) We look for industries that are less likely to change in the next decade

We believe there are two distinct approaches to investing. One is to back visionary companies that aim to shape the future, accepting the inherent risks of their success. The other is to invest in businesses that are foundational to industries we are confident will remain stable and essential over the next decade.

We firmly align with the latter approach. Rather than speculating on what the future of an industry might hold, we ask a different question: What will remain unchanged in this industry over the next 10 years? By identifying and investing in these enduring pillars, we build portfolios designed for stability and long-term value creation.

2) Margin of safety

We adhere to the time-tested principle of Margin of Safety, a cornerstone of value investing. This approach involves investing in companies at a price significantly below their intrinsic value, providing a buffer against market volatility, unforeseen challenges, or miscalculations. By prioritizing this cushion, we aim to protect capital while positioning our portfolios for sustainable, long-term returns. The Margin of Safety reflects our commitment to disciplined, risk-aware investing, ensuring resilience in an ever-changing market environment.

3) Aligned ownership

We prioritize companies with a clear controlling shareholder, as this often fosters stability and long-term strategic focus. We particularly value situations where the CEO is the controlling shareholder or holds a significant financial stake in the company through substantial share ownership. This alignment of interests ensures that leadership is deeply committed to the company’s success, driving decisions that enhance value for all stakeholders. By investing in businesses with such aligned ownership, we seek to partner with management teams whose incentives mirror our own.

Lema Capital searches for undervalued assets which meet the following criteria:

1) High returns on invested capital

2) High net profit margin

3) Low/reasonable financial leverage

4) Executive management with great track record

5) Attractive valuation

In essence, Lema Capital employs a tailored, proactive strategy focused on maximizing client returns through individualized asset selection, rather than following a standardized, index-based approach.