Picking the right tool for the job
Ratios are shortcuts for understanding value – sometimes they enlighten and sometimes they deceive. At Forager, we apply relevant ratios or mental models to a business in order to understand it better. Different tools for different companies must be used depending on the type of business we are researching. Like a tradesperson selecting the right tools, picking the correct ratio or model is a skill built through experience. Selecting the right tools can be a question of specialisation – many investors specialise in particular areas, but the successful ones stick to what they’re good at. In this featured insight, we talk through a simple example of which tools might be used when valuing a farm verses a medical practice.
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Steve began Forager Funds in 2009, and now manages approximately $400m across two funds. The Forager Australian Shares Fund and Forager International Shares Fund are both unlisted and are available to investors with daily applications and redemptions. Steve focuses on long-term investing in undervalued and sometimes unloved companies.
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