Himalaya Capital LLC

I am a long-term investor, not a trader. My approach has the following characteristics:

• Fundamental: I focus on the business underlying the stock, not the stock itself, or the company’s brand.
• Rational: I buy low and sell high. (Contrary to momentum buyers, who buy at a high price expecting the price to rise further.) I go by the book.
• Adaptive: I rewrite the book as necessary
• Quantitative: I use financial quantities like the Sharpe Ratio, the business’s discounted cash flow, and concepts from Modern Portfolio Theory
• Managed: I set goals and track my results against them. I strive to optimize my portfolio. Instead of “micromanaging,” I identify and invest in businesses and then let go. I maintain an opportunity pipeline.
• Simple: My approach is not easy, but I seek businesses that are easy to understand and therefore predictable

Tools

I rely primarily on the following tools for my investment efforts:

• A variety of media for tips.
• Software I developed for automatically forecasting returns on a large number of stocks.
• The public library’s online resources to do in-depth research on promising businesses.
• A word processor to document my research and record decisions.
• Spreadsheets to record detailed analyses of stocks, businesses, and portfolios.
• Personal Financial Management software to record trades and run reports.