We don’t. Our focus isn’t on the daily movements of the stock market, but on the best businesses and earnings models.
During the first phase of the Sifter investment process, we use our proprietary Stocksifter suite to sift through 65,000 companies on the global stock market, based on our fine-tuned criteria.
The result is a list of around 5,000 potential candidates.
Our screening process is ruthless and purely mechanical. We can’t afford to be soft.
At this phase of the screening process, our focus isn’t on the valuation of a company but on its key figures, which can help us identify companies with exemplary earnings models.
It is after this step that we will also look into the valuation of each company.
Stocksifter ranks the companies that have met our criteria by price and presents them to our analysts. This way, our analysts can focus on the investment opportunities with the most potential.
Thanks to Stocksifter’s mechanical screening process, we can discover the best investment targets from every country, industry and sector.
Our approach differs significantly from the way most financial institutions approach the stock market, as our focus isn’t on any specific section or industry.
It is unlikely that the best earnings models in the world are located in one single country.
Since it takes time to analyze a business, we must limit the number of companies that we subject to our analysis process.
Instead of limiting our monitoring process to a geographic location, Stocksifter allows us to focus on analyzing the companies that, on the basis of their key figures, possess particularly exemplary business models.
If a particular sector falls out of favor with investors, i.e. the valuations of a large group of companies are suddenly reduced by an attractive margin, our analysts will be provided with a slew of options from that sector for further inspection.
If we feel that these are better than the companies in our portfolio, we will invest in them.
It should be noted that even if a particular industry is represented especially well in the Sifter Global portfolio, this should not be taken as an indication that said sector of the market has been undervalued as a whole.
We analyze companies, not industries.
Stocksifter’s screening process is absolute: we will never invest in a company that does not meet our predefined numerical criteria.
There are no shortcuts or loopholes to this process.
Even if one of our analysts receives a hot tip or a member of the Investment Committee has become enamored with a particular company, we will not analyze it if it does not meet Stocksifter’s exacting criteria.
Member of the Sifter Investment Committee