Be willing to hold cash if investments do not meet our criteria.
Very simply put, if we cannot find companies that meet our valuation and quality criteria we will not invest our shareholders’ money. We will preserve capital until an appropriate investment opportunity arises.
Our focus on buying high-quality businesses trading at wide discounts to their net asset value has served us well over the long term. There are periods of time, however, when our style is out of favour and the types of companies in which we invest are ignored by the broader market. This requires us to be patient and to remain true to our style, so that when other investors begin to appreciate the value in those companies, we are well placed to benefit. In the short term, this means that there could be some volatility in our returns. However, we are confident that we own high quality businesses, which are trading on cheap valuations and which generate reasonable cash dividends for us as we wait for the value to be appreciated by the market.
Members of the investment team at AVI invest their own money in funds which they manage. As at 30 September 2015, AVI, its directors and staff owned approximately 900,800 (2014: 872,000) shares in British Empire Trust plc.
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