The Hunters' Framework
Buy more, not less
The Hunters' Framework is an investment strategy that involves buying more of a stock when its price falls, rather than selling. This approach is based on the idea that a stock's price can be temporarily depressed due to market irrationality, and that buying more at a lower price can lead to long-term gains. The framework requires investors to have a thorough understanding of the company's fundamentals and a strong conviction in their investment thesis.
- Investors should have a long-term perspective and be willing to take calculated risks.
- A stock's price can be temporarily depressed due to market irrationality.
- Buying more of a stock at a lower price can lead to long-term gains.
- Develop a thorough understanding of the company's fundamentalsInvestors should conduct thorough research on the company's financials, management, industry, and competitive landscape.Pro tipUse a variety of sources, including financial statements, news articles, and industry reports.WarningDon't rely solely on analyst reports or recommendations from others.
- Develop a strong conviction in your investment thesisInvestors should have a clear understanding of why they are investing in the company and what they expect to happen in the future.Pro tipWrite down your investment thesis and review it regularly.WarningDon't invest in a company without a clear understanding of its prospects.
- Buy more of the stock when its price fallsInvestors should be prepared to buy more of the stock when its price falls, as long as their investment thesis remains intact.Pro tipUse a dollar-cost averaging approach to reduce the average cost of your shares.WarningDon't buy more of the stock if your investment thesis is no longer valid.
- Monitor and adjust your portfolio regularlyInvestors should regularly review their portfolio and adjust their holdings as needed.Pro tipUse a variety of metrics, including valuation ratios and financial statement analysis, to monitor your portfolio.WarningDon't be afraid to sell a stock if your investment thesis is no longer valid.
A Hunter bought Aker Solutions stock at €15.84 per share and later bought more at €7.61 per share, reducing the average cost of his shares. He sold the stock at €9.58 per share, realizing a profit of 24%.
A Hunter bought Experian stock at £9.02 per share and later bought more at a lower price, reducing the average cost of his shares. He sold the stock at £7.06 per share, realizing a profit of 19%.
The Hunters' Framework was developed by a group of successful investors who realized that buying more of a stock when its price falls can be a winning strategy. They learned this through experience and by studying the behavior of successful investors such as Warren Buffett.