Strategies / midori
A concentrated, long-only model portfolio of 12 to 20 quality US companies, selected through fundamental research with a five-to-ten-year investment horizon.
Selection
The mandate
Common shares listed on the NYSE, NASDAQ and NYSE American, in businesses that can keep a durable advantage for five to ten years or more.
There is no size floor. Companies under $1 billion must show adequate liquidity and disclosure. Retailers are judged one by one, on evidence of a real mechanism such as purchasing scale or franchise royalties, never on management's own claims.
Research time
Mostly $1 billion to $50 billion in value, where fewer analysts are looking.
Proven, high-return businesses, bought only at a sensible price.
Quality businesses mispriced by a one-off event.
Process
The mandate narrows the US market to 381 eligible companies.
Company filings, earnings calls and ten years of financial results form the evidence base.
We examine competitive advantage, management's allocation of capital and the risks that could erode future earnings.
We value owner cash flow after stock-based compensation, using explicit assumptions for share count and the cost of equity.
An independent review tests the figures, valuation assumptions and counterarguments before the report is finalised.
Each report includes a fair value estimate and a rating. We assign Buy when the expected return beats the cost of equity by 2 points and Sell when it falls 2 points short. A return between those thresholds receives a Hold rating.
Risk rules
Largest starting position. Reviewed if it grows past 12%.
Most in any one sector.
Positions are sized for an exit within five trading days at no more than 5% of daily volume.
Drawdown that triggers a full review. At −25%, no new positions.
Companies with net debt above 2.5× EBITDA get a balance-sheet review. VTI, the US total market, is our primary benchmark. SPY provides a second comparison.
Research
Initiation in progress.
A concentrated model portfolio built from our published research, with performance measured against VTI, the US total market benchmark.