DEEP RESEARCH · INVESTMENT PHILOSOPHY
Investment Philosophy Draft: Long-Term Cash Flow, Volatility, and Concentration
Not a finished manifesto, but a first draft of personal investment principles to revise over time
0. Bottom line first
Building an investment philosophy is not easy, but simply organizing my current principles and direction is meaningful. Even if it is not perfect, I plan to record what matters now and revise it over time.
1. Set the long-term goal
The purpose of investing is not short-term cash flow, but increasing future cash flow after retirement.
Over the long term, I want to look toward the point when I receive pension income, focus on assets with sustainable advantages, and invest without being shaken by volatility. In particular, I want to invest where assets can grow and select good industries and managers.
Interpretation: My goal is not near-term price movement. It is to hold assets that can increase future cash flow over time.
2. Endure volatility
Market volatility is unavoidable. As the saying goes, stocks move from those who cannot endure volatility to those who can. I want to practice investing that does not shake, based on thorough research and conviction in the company.
Check when it feels good
When a stock rises sharply and I feel good, I revisit the original investment idea.
Review further growth
I check whether there is additional future growth or a realizable idea.
Compare undervalued assets
I also check whether assets such as government bonds, gold, or dividend stocks are deeply undervalued.
At that point I should ask myself: “If there are many undervalued assets available, does it still make sense to keep concentrating in this stock?”
3. Concentrated investing and crisis response
Concentrated investing should be limited to companies near the bottom of their PBR band and companies where I judge future change to be at least 95% likely to materialize.
I analyze how a company handled past crises and use management’s decision-making in those moments as an important criterion. I also look carefully at companies that outperform on the chart during market crisis periods.
Interpretation: In a crisis, many companies’ share prices can move into oversold territory, so there may be cases where valuation matters somewhat less than usual. Crisis response and management judgment become more important.
4. Execution checklist
- Confirm that the purpose of investing is increasing future cash flow.
- Evaluate both the industry quality and the quality of management.
- When a stock rises sharply, revisit the original investment idea.
- Compare whether alternatives such as government bonds, gold, or dividend stocks are undervalued.
- Limit concentrated investing to cases that pass the low PBR band and 95% realization-probability standards.
- Review how management made decisions during past crises.