INVESTMENT APPROACH

The investment approach is built on a simple idea: long-term wealth is created not through excitement or prediction, but through discipline, patience, and sound decision-making repeated over time.

The mathematics of compounding (1 + r)ᵗ show that even modest returns (r), when sustained over long periods (t), can lead to extraordinary outcomes. Achieving those results requires patience to endure market cycles, discipline to avoid costly mistakes, and the judgment to focus on businesses that can endure.

This philosophy rests on four guiding principles: avoiding big risks, buying good companies, paying a low price, and thinking like a patient business owner.














Together, these principles form the investment approach of Bajic Capital for making rational decisions through time.

Avoid Big Risks

Not losing money should be the number one priority. There is a nonlinear relationship between losses and the required gain to recover. A 10% loss needs ~11% gain, but a 50% loss needs 100% gain just to break even. 

While most investors focus on finding good investments, it is far more important to avoid bad ones. In investing, there is no such thing as a sure bet. Even the most blue-chip business has a probability of not being in business tomorrow. 

Investment risk is not defined by volatility or beta. Those are merely measures of price fluctuation. The true risk is permanent loss of capital. That definition governs all decisions. 

Buy Good Companies

A good business is profitable, has a durable competitive advantage, and returns excess cash to shareholders. It is run by honest management with “skin in the game,” while operating in a steady, slow-changing, and understandable industry.

Why do these specific traits matter?

Because profitability without protection quickly attracts competition and fades. Durable advantages, aligned management, and stable industries allow profits to persist and be allocated wisely. Together, these traits make long-term compounding possible.

Pay a Low Price

Even a high-quality business can become a poor investment if bought at an excessive price, making valuation critical for long-term returns.

Market prices fluctuate far more than the underlying value of businesses. Even the world’s largest companies often experience large valuation swings in short periods, usually driven by shifts in investor sentiment rather than fundamental changes.

These fluctuations create opportunity. When pessimism pushes the price of a strong company below its intrinsic value, attractive entry points appear. When enthusiasm drives valuations too high, patience becomes essential.

Rather than predicting short-term market moves, the goal is to buy strong businesses when the odds are favorable.

Patient Business Owner

Successful investing is less about constant activity and more about allowing time for business value to compound. Many investors trade frequently in response to market noise, short-term price movements, or prevailing opinions. This behavior often interrupts the compounding process and leads to inferior results.

A more rational approach is to think like a business owner. Buying shares represents purchasing a partial interest in a real enterprise that produces goods or services, generates profits, and reinvests capital. The value of such a business grows gradually as earnings accumulate and are reinvested over time.

Over long periods, this quiet process of reinvestment and growth becomes the primary driver of investment returns.