事業内容Our Business

The asset management strategy of Single Family Office is firmly rooted in “True Value Investing,” which focuses on capturing true intrinsic value that grows over the long term, remains volatility-agnostic.

True value investing can be distilled into two essential principles:

• iInvesting to profit from the discrepancy between intrinsic value and the price paid
• iiInvesting with time as an ally

We deliberately use the term “true” because this concept differs fundamentally from what is commonly referred to as “value investing,” often simplistically translated as merely investing in undervalued stocks.

The first principle — “profiting from discrepancy” — requires the continuous comparison between intrinsic value and market price. It means that one cannot generate superior returns simply by buying something because its price appears low, or because the market has declined.

“Value” refers to what an entity itself creates. In the case of a corporation, value is created through the company’s own business activities and economic output. “Price,” by contrast, is determined by the quantity desired by others at a given moment — in the equity market, by what shareholders are willing to pay at that particular time.

It is often said that “enterprise value equals market capitalization plus interest-bearing debt.” This, however, is clearly incorrect as a definition of value. It represents not value, but merely the current market price of the enterprise. Accordingly, the proper expression would be “enterprise market value,” not intrinsic value.

Because true value investing is an investment in a company’s intrinsic economic value, it does not concern itself with short-term stock price movements, market timing, or fluctuations in sentiment. Nor does it rely on price action itself as the basis for analytical judgment.

Any approach that seeks to profit merely from rising stock prices without a corresponding increase in intrinsic value — even when framed as a “fundamental” approach — is, in essence, speculation rather than investment.

The second principle — “making time your ally” — also differs materially from the conventional image of value investing as simply “finding neglected cheap stocks and waiting for them to rise.”

The essence of true value investing lies in identifying companies that possess durable competitive advantages supported by formidable barriers to entry capable of generating franchise value, together with business models that continuously reinforce and protect those advantages. Such businesses should be held for as long as their competitive superiority remains intact, thereby allowing investors to benefit from the long-term, continuously compounding growth of intrinsic corporate value.

In other words, the core of true value investing is compound thinking.

Cash generated by a company yesterday is reinvested today; cash generated today is reinvested tomorrow. Corporate activity inherently embeds a compounding structure, and superior businesses are capable of achieving compounding growth over extended periods of time. Therefore, the key to long-term value creation is selecting companies capable of generating sustainable and stable value on a recurring basis.

To identify such businesses requires persistent and rigorous engagement with each investment opportunity, forming hypotheses without prematurely excluding possibilities, and verifying them one by one with intellectual discipline. It also requires maintaining an adequate margin of safety at all times, acting with rational self-discipline, and being able to clearly explain the reasoning behind one’s investment decisions.

Equally important is the ability to respond swiftly when the original investment thesis deteriorates or when facts emerge that impair the company’s competitive advantage.

Such a calm, rational, and humble approach is indispensable to true value investing.