30 June 2025 – The Value of Cash
Cash isn’t a drag — it’s deliberate optionality and risk control. In this quarter’s letter we explain why we let cash build when margins of safety are thin, then deploy it decisively into dislocations (e.g., April 2025’s sell-off) to protect capital and compound over time. We outline our absolute-return mandate, the valuation discipline behind raising/holding/redeploying cash, and why being benchmark-agnostic makes cash a competitive advantage.
Keywords: Cash Allocation, Dry Powder, Optionality, Risk-Adjusted Returns, Capital Preservation, Absolute-Return Mandate, Valuation Discipline, Market Dislocations, Drawdowns, Portfolio Resilience, Antifragility, Benchmark-Agnostic, Deployment Playbook, April 2025 Sell-Off.
31 Mar 2025 – Conglomerate Discounts
While headlines focused on tariffs and tech volatility, a quieter story emerged: conglomerates are back on our radar. From CK Hutchison’s asset unlock, to News Corp’s revaluation, and Berkshire’s steady climb, this letter explores how complexity — when paired with quality — can deliver strong long-term returns.
Keywords: Conglomerate Discount, Capital Preservation, Monopolistic Businesses, Catalyst Investing, CK Hutchison, Portfolio Resilience, Sum-of-the-parts Valuation, High Quality Assets, Selective Opportunism
31 Dec 2024 – Keeping a Sharp Valuation Focus with Occam's Razor
We explore the concept of valuations and our 5AM Capital framework rooted in Occam's Razor. In investing, simplicity often holds the key to success. Inspired by Occam's Razor, the timeless principle that favours fewer assumptions, we focus on essential drivers of durable value whilst avoiding unnecessary complexity. Simplicity isn't easy — it’s a discipline that requires clarity and focus, built through time with experience and diligence.
Keywords: Occam’s Razor, Intrinsic value, Monopolistic businesses, Valuation triangulation, Long-term investing, Competitive moats, Global equity fund, Sector diversification, Market discipline, Sustainable growth
30 Sep 2024 – Win-Win-Win
We explore the concept of ‘Win-Win-Win’, which underscores the importance of companies that prioritize the interests of shareholders, customers, employees, and the community. Amazon/AWS is used as an example of customer-centric innovation, contrasted with Coca-Cola’s pricing strategy that may strain its ecosystem over time.
Keywords: Win-Win-Win, Stakeholder alignment, Long-term value, Amazon innovation, Customer-centricity, Durable investments, Business moats, Scalable models, Coca-Cola critique, Sustainable growth
30 Jun 2024 – Capital Light or Capital Heavy?
This note explores our focus on prospective return on invested capital (ROIC) in light of a step change in AI capex by big tech. Is Microsoft becoming more like an infrastructure play with Azure?
Keywords: Capital Light, ROIC, AI, Incremental returns, Scalable models, Free cash flow, Big tech, Risks, Valuations, Cyclicality of businesses, Investment cycles
31 Mar 2024 – Capital Preservation
We discuss our approach to capital preservation, defining risk as permanent capital loss — not volatility — and highlighting how we avoid exposure to fraud, regulatory changes, excessive leverage, and poor management.
Keywords: Risk management, Asset allocation, Safe haven assets, Principal protection, Low volatility, Fixed income securities, Defensive investing, Portfolio diversification, Treasury bonds, Cash equivalents
31 Dec 2023 – The Art & Science of Portfolio Management
We detail our approach to portfolio construction — more than just picking stocks — and how it involves positioning across risk, sectors, and regions to drive sustainable long-term returns.
Keywords: Asset allocation, Diversification, Risk tolerance, Investment strategy, Portfolio optimization, Performance benchmarking, Rebalancing, Active management, Passive management, Expected returns
30 Sep 2023 – Selling – The Hardest Part of Investing
Though we rarely sell, this letter discusses our disciplined sell process, and walks through five recent examples, each with a different rationale.
Keywords: Exit strategy, Profit-taking, Stop-loss orders, Capital gains, Tax implications, Market timing, Liquidity, Overvaluation, Rebalancing, Sell signals
30 Jun 2023 – Going Global
We explain why global listed equities provide access to the highest quality businesses worldwide and analyse core components of the ASX, including banks and mining.
Keywords: Emerging markets, Developed markets, Market capitalization, Diversification, Currency risk, Equity valuation, Sector allocation, Growth stocks, Dividend yield
31 Mar 2023 – Incentives and Outcomes
We discuss management alignment through stock ownership, highlighting Eurofins Scientific as a family-run compounder with aligned incentives and long-term vision.
Keywords: Alignment of interests, Incentive structures, Capital appreciation, Short-termism, Long-term value creation, Benchmark performance, Owner mindset
31 Dec 2022 – Inflation, Friend and Foe
We challenge conventional views on inflation, showing how its effects are uneven across industries. Visa is highlighted as a company with embedded pricing power and inflation-linked revenues.
Keywords: Real asset equities, Commodity-linked equities, Dividend growth stocks, Cyclical sectors, Pricing power, Equity risk premium, Inflation-adjusted earnings, Value stocks, Global diversification
30 Sep 2022 – The Negative Art of Investing
At 5AM, investing is as much about what we avoid as what we own. We explore our filtering process through the lens of Alphabet, and why our discipline matters more than ever.
Keywords: Negative screening, Exclusionary criteria, Controversial industries, Screening out risk, Exhaustive assessments, High quality businesses, Durable
