Volatility is not our enemy, loss of capital is. This is how we at Karma understand risk. We build the portfolios from the bottom-up, one stock at a time. Rigorous due diligence, focus on corporate governance, management quality and above all, the price you pay for an investment; these define risk.
We admit, and learn from our mistakes. Sometimes we prefer to sell, clear our heads and move on.
We believe that sizing our positions correctly to account for liquidity, volatility and market capitalization is a basic tenet of risk management.
We maintain rigorous risk management throughout the investment process. We actively seek out contrary opinions, and try to rebut rather than confirm our investment hypothesis.
Our wide opportunity set increases diversity across sectors and has the added benefit of reduced directional risk. We also examine cross-correlations between sectors to determine the weight of a given economic scenario in our portfolio.