READSCAPITAL

Statements

Principles

1. Identify mispriced profitable assets

   1. Profitability is measured by gross profits-to-assets.

      1. gross profits-to-assets is decomposed into SalesAssetsGross ProfitsSales

         1. Levered sales without much assets

         2. Pricing power and cost efficiency

   2. Mispricing is caused by bias towards accounting performance. Mostly recognized as low Price to gross profit ratio.

2. Avoid paying risky prices

   1. Depressed and low volatile prices reduce drawdown risk.

   2. Undervalued to intrinsic value.

3. Compound risk adjusted returns

   1. The low volatile profitability is identified as a high Sharpe Ratio of the business.

   2. Structural stability of the business.

      1. Recurring, repetitive transactions

      2. Low debt

      3. Low accruals

Principle

1. Identify mispriced profitable assets

2. Buy at risk reduced prices

3. Compound risk adjusted returns

Strategy

1. Engage with board of directors and control capital efficiency

2. Shareholder Activism

3. Reaching out to Strategic buyers

Background

1. Effissimo Capital Management Pte Ltd

2. Venture Capital

3. Specific purpose vehicles

4. Management of Recurring business

5. Advisory to IPO companies

Moral

1. Buffett approach in Micro

2. Druckenmiller approach in Macro

3. Swensen approach in Management