Investment Philosophy

• Economic growth is an essential foundation of free market capitalism and our society
• As the economy grows so do stocks and the stock market
• Stocks traded on the stock market represent fractional ownership interests in businesses
• Using valuation methodology stocks can be valued
• In the short term, stock price fluctuations are a reflection of investor psychology
• Over the long term, stock prices revert either up or down to their mean or implied valuation
• By buying certain stocks below their implied value and avoiding stocks trading above their implied value, investors can make superior returns, over time.

Valuation Methodology

Ostrava believes a company is worth the net present value of its discounted future earnings.

Ostrava utilizes a variation of the generally accepted dividend discount model to value a business. In addition, company’s earnings, balance sheet and cash flows are reviewed quantitatively for measures such as return of equity, return on capital and debt to equity.

In addition to numerical analysis, companies are assessed qualitatively for measures such as competition, management effectiveness and forthrightness and growth prospects.

However, we specialise in identifying opportunities for relatively short-term investments to be made on the Australian Stock Exchange utilizing the 100% geared Flexible Investment Facility (FIF) that enables clients to gain exposure to a larger number and value of shares than they otherwise may be able to acquire.