The Dass Capital Extraordinary Companies Porfolio

Introducing our global portfolio

Author

Raj Dass
September 24, 2023

Dear Investors,

I have managed portfolios for about a decade and a half.

And I was terrible at it when I started.

It was so frustrating to buy stocks only to have them go down almost immediately after I purchased. Managing a portfolio very profitably seemed almost impossible.

But with perseverance, many costly mistakes and a lot of learning, I finally got the hang of it. It’s a lot of work and a lot of keeping your emotions in check.

I’m hoping to share lessons, which will spare you some of the pain and all of the costs, by bringing you along for the ride as we create a global portfolio of extraordinary companies.

(Please remember that this is not financial advice. You have to plan your investments in line with your goals, your risk tolerance and your time horizon. It is good idea to get the help of a professional financial advisor. Pay them a consulting fee, not a percentage of your investments.)

Sincerely, Raj

Exciting news!

Today, we are unveiling the Dass Capital Extraordinary Companies Portfolio. This is our global investment portfolio, where we invest in companies that we think are extraordinary.

The best part is that you will be able to follow along - live:

  • We will give you updates and explanations on the portfolio every month, right here in the newsletter.

  • Also our portfolio is on Savvy Trader (www.savvytrader.com), so you can sign up to see the portfolio live (details below).

  • If you follow the portfolio on Savvy Trader, you will receive email updates when we buy and sell, and get a weekly wrap.

Now let’s talk about the portfolio.

Our investment philosophy

We call our investment philosophy Investing in Extraordinary Companies. In fact, this has been our motto at Dass Capital since we started. It’s great to be able to put that into an actual portfolio, that we can share with you.

What does that mean in terms of investing?

To us, extraordinary companies have the following characteristics:

  1. They are high-quality businesses and you can see it in their financial performance.

  2. The business generates positive and stable Economic Value Added (EVA).

  3. The business must have scope to reinvest earnings at high rates of return.

  4. The business must generate good free cash flow growth.

  5. The business should require little to no debt to grow.

  6. The business must have high margins or high asset turns.

  7. The business must have a sustainable competitive advantage.

  8. The business must be run by honest and candid management.

  9. The business must be resilient to obsolescence.

  10. Secular growth should underpin the industry.

Where do we find extraordinary companies?

Extraordinary companies are a tiny percentage of the companies found in stock markets across the world. I estimate that they make up 0.3% of all companies out there. There are approximately 65,000 listed companies in the world. From that list, extraordinary companies (by our definition) number around 200 companies.

What is in the portfolio?

Our portfolio was started a while ago and currently has four positions:

  1. Berkshire Hathaway

  2. Microsoft

  3. Visa

  4. Mastercard

Each one of these is an extraordinary company in its own right. But Berkshire Hathaway is probably the odd-duck in this list because it is a holding company, not an operating company. That means it has to be measured slightly differently.

How is the portfolio performing?

Portfolio performance measurement is a topic on its own, which we will get to. However, I like to measure performance using Internal Rate of Return (IRR). Don’t worry, IRR is much simpler than in it sounds. You can think of IRR as an interest rate - similar to what you get on your savings account.

Here is how we are doing in IRR terms. As you know, global markets are down, however, our portfolio compares favourably to both the S&P 500 and the S&P Global Broad Market Index.

Portfolio performance (September 2023)

Portfolio construction

The portfolio will consist of global companies, chosen from multiple industries:

  • technology,

  • consumer products,

  • healthcare,

  • industrial conglomerates,

  • media,

  • food & beverages.

The number of holdings in the portfolio will be limited to 10.

I know what you’re thinking: “that’s not enough to be diversified”. We introduced you to the core-satellite portfolio earlier this year. Think of this as the satellite part of the portfolio.

How can you see the portfolio live?

  • Go to www.savvytrader.com

  • You can register using an email address (it requires an email and name)

  • Log in

  • Click Discover on the top menu

  • Type “Dass Capital” in the search bar

  • Click Join and select the notifications you want sent to you.

  • You can also click on the portfolio to see details.

If you cannot find the portfolio, click this link:

Bear in mind that the portfolio performance shown in Savvy Trader is different to the actual performance. This is because Savvy Trader looks up prices when you add to the portfolio. So it used current market prices, not the prices we paid for the stocks. Over time, that should become less of an issue.

You do not have to register for Savvy Trader, unless you want to. We will be doing updates and discussions on the portfolio right here in the newsletter. So you can get everything you need here.

Remember:

  • If you have questions for us, you can reply to this email.

  • You can also drop a comment on this post.

    • Click the ROA picture at the top of the email.

    • Click on this post.

    • Type your comment.

    • If you’re a subscriber, your email is your login.

What did you think of this edition?

Login or Subscribe to participate in polls.

Connect on social media.
You can also reply and send us suggestions on investment topics that you would find valuable.
If you found this enjoyable, feel free to share it.

Join the conversation

or to participate.