Why We Do It
Our Investment Philosophy
Crises, which take place frequently, create opportunities for investment in large and strong franchises at extreme discounts, given investors’ tendency to exit at any cost
More importantly, in country wide crises, the large asset price drawdowns are most often followed by forceful rallies, allowing for a very dependable investment cycle
This reversion to the mean is a much more repeatable occurrence in relation to country wide crises than to investments in single companies in normal conditions
Extremely discounted companies in normal condition investing frequently become value traps or go out of business whereas countries typically recover; only a very small minority become failed states1
To learn more about Helm’s rationale for crisis investing, please read our research paper The Lost Decade for Buy-and-Hold Emerging Market Investors.
1 As former Citicorp Chairman Walter Wriston used to say “countries do not go bust”. Chairman of Citicorp 1970 – 1984.