The Alpha Exponent aims to help you find your edge by arming you with the analysis, ideas and insights. We combine value investing with a quant edge, and write about our high-conviction trades, as well as those we decided against.

To increase transparency, we also provide a regular tracker to show how a portfolio of the securities we write about would perform, if a position were to be built up in the week following the release of each post.

We are not just investors but also business analysts, as Buffett asserted:

"When we buy a stock, we attempt to think like prospective owners of a business, not like traders. Specifically, we ask ourselves: 'If we could buy into a business that is exactly like this one, would we be willing to do so at this price?'

— Warren Buffett

But you don’t need to ascribe to the same investment philosophy as we do. Identify what works for you, and maintain discipline. Anyone can do it.

Isn’t investing risky though? Here is how we think about investment risk - worth a read if you are just thinking about starting out on the journey.

What’s up with the name and the logo?

Alpha, the holy grail for investors, refers to your edge in the market.

It came from the CAPM model, which combined with continuous compounding gives:

\(Total\hspace{0.15cm}accumulated\hspace{0.15cm}wealth= P e^{(R_f + \beta_i (E(R_m) - R_f) + \alpha_i)t}\)

Looks complicated but the α exponent term is what drives superior long-run returns.

We can all be alpha exponents (in both senses of the word), and you don’t even need to get too deep into maths (if you don’t want do).

Disclaimer and Disclosure

The Alpha Exponent is not intended, nor should be construed as investment advice. No articles nor assertions therein constitute an offer or solicitation to buy, sell or otherwise partake in any investment transaction.

We often write about the securities that we are buying, holding or selling, and it is our belief that this helps align the interests of our readers and ourselves. Past performance is no guarantee of future results. Readers should conduct their own research or consult with financial advisors before making any investment decisions.

The Alpha Exponent and its contributors do not accept any liability for any loss or damage arising from any action taken based on analysis we provide. No part of this newsletter may be reproduced without permission, but we welcome discussions regarding collaboration, reproduction or adaptation.

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Assessing businesses for investment