Frequently Asked Questions
Common stocks of publicly traded companies.
The auction-driven nature of the securities markets allows us to buy portions of outstanding businesses at large discounts from the prices they would command in negotiated transactions involving entire companies.
Unleveraged, long-only, focused, value investing.
Just as a private real estate investor looks to his properties to determine whether he made a sound investment, we look to the long-term business performance of our investees, not their daily stock price movements. Over time, stock price performance converges with business performance.
By investing in businesses that we understand, possessing strong competitive advantages, run by able people and at sensible prices.
The value of a business is the present value of future discounted cash flows that it will generate for distribution to its owners over its lifetime.
RBX is a one captain ship. There are no analysts and all investments are made and researched by Direk Khanijou.
Generally, we’re not interested in real estate based operations, oil and gas exploration, commodities, biotech, pharmaceuticals, gambling and capital-intensive heavy manufacturing.
- Our potential universe of investments is much larger than private equity and other strategies
- We are not required to open offices around the globe.
- We don’t need any traders and analysts working around the clock
A holding company with 100% ownership of each of its subsidiaries has the advantage of control but it would not be able to:
a) Acquire more ownership in a strongly performing, undervalued subsidiary
b) Reduce its interest in each subsidiary without incurring material tax, transaction and other frictional costs, which include the time required to sell an interest in a private company
In contrast, we can always:
a) Purchase more of an existing investment if the price becomes even more attractive
b) Easily redeploy capital into more attractive opportunities
No. As a minority investor, we do not have the right to influence management policies of our investees. However, we view this as a significant advantage since it frees up a considerable amount of time and resources.
When we own great businesses run by excellent management, our job is to simply applaud from the sidelines.