Insights

IOI Methodology

Why do IOI’s Asymmetric Value Strategies Work?

  • DECISION EDGE

    Overcoming damaging biases in our decision-making processes and identifying biases in others allow us to view the markets with greater equanimity and take advantage of opportunities born during times of stress. By educating you to the interaction between behavioral biases and structural pitfalls, IOI prepares you to manage both successful and struggling investments effectively.

    The IOI Decision edge comes from

    • Identifying how our own thought processes can act in opposition to our best economic interests and how to avoid falling prey to these biased processes.
    • Understanding how investing professionals’ compensation structures often motivate them to act in opposition to our best economic interests and how to avoid falling prey to these structural pitfalls.

    Each of these elements work together to give highly-engaged investors the confidence and competence to invest like the most sophisticated institutional investors.

    IOIEdge
    Elements of the IOI Investing EDGE
  • VALUATION EDGE

    Value Investing relies on the difference between a stock’s price and its intrinsic value. IOI Training builds a robust and scientific framework for assessing value based on the only unambiguous measure of a company’s financial success – cash flow creation. The IOI model is so powerful the World Bank relies on it to decide what companies to invest in globally.

    The IOI Valuation edge comes from

    • Cutting through financial market noise to focus in on the handful of factors that drive cash flow creation in the short-term
    • Understanding how to assess a company’s likely future growth – the predominant factor that drives cash flow creation in the medium- and long-term
  • STRUCTURING EDGE

    Most amateur investors think about investments in black and white terms – buying stock or selling it. Institutional investors understand that the structure of an investment often determines its success or failure – limiting downside risk and accentuating upside return. IOI teaches a method to create “asymmetric” investment structures by layering option contracts on an underlying position of stock and cash. These structures allow you to tilt the balance of risk and reward in your favor and profit from your insights into company value.

    The IOI Structuring edge comes from

    • Understanding how to effectively assess the value of and utilize the peerlessly flexible financial tools known as options.
    • Knowing when and how to incorporate options into an investment portfolio, when to use options as levered instruments, and how to measure and manage leverage in your portfolio.

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