Independent Verification is Essential in Technology Investing
We don’t do a lot in the emerging technology space. We’re not very good at it. And perhaps part of the reason is because it is difficult to verify many of the claims that abound. Warren Buffet coined the phrase ‘circle of competence’, but in the technology space its more about being across a large amount of timely news flow – else you literally don’t know what you don’t know. For these reasons, we like to invest in companies that have verifiable prospects. One current technology investment we hold is Icar Asia Limited (ASX:ICQ). ICQ has made a lot of ‘claims’ that we can independently verify. For example, we can verify that it has the #1 position in Malaysia, Thailand and Indonesia. We can ‘verify’ that the model is gaining traction because cash receipts – not phantom clicks – are up 169% on the pcp. And we draw confidence from the fact that the $2.6bn leader – Carsales.Com - has also undertaken a substantial amount of due diligence and built a 20% stake at prices up to $1 per share.
Katana Asset Management was founded in September 2003 as a boutique investment management firm. Katana employs an all opportunity investment mandate being style, sector and market cap agnostic.