In essence, Platinum seeks to own a broad range of exciting companies whose businesses and growth prospects are being inappropriately valued by the market. To do this, Platinum employs a team of specialist analysts who take a global perspective and apply software and intensive research to pin-point outstanding opportunities.

Market behaviour
Just as there is the ebb and flow of optimism and pessimism in stock markets, similar sentiments affect the share prices of individual companies. That is to say, there are times when events that are transitory in nature have a totally disproportionate effect on a company's share price, be it positive or negative. There is thus a tendency for shares to deviate significantly from their inherent trend line. The secret lies in differentiating truly interesting companies that are facing temporary set-backs from those which have lesser businesses and face fundamental problems.

Screens
Platinum uses various devices to make sense of the universe of stocks available in a global context. These include software screening which allows for the selection of companies based on very specific criteria ('screens') across a databank of several thousand companies. Platinum is able to delve deeply in cross-comparative studies of companies around the world, thereby drawing up short-lists for more intense study.

In setting these screens, Platinum may build on a hypothesis regarding social, political, or economic change. For example, the screens may seek to identify industry groups that are currently out of favour with investors. Great store is placed on the cross-pollination of ideas and the view that more weight should be applied to the global context of a company's operations than purely regional considerations.

Idea generation
Generation of themes and ideas is eclectic. The application of numeric skills is supported with a constant input from observations of the changing social and political landscape. By locating the research efforts together in one place and yet operating under global mandates, Platinum is able to facilitate the free-flow of information between managers with different geographic and industry responsibilities. While the physical distance from principal markets can be an impediment, it has been found that distance has the great advantage in acting as a filter as well as a calming influence enabling a more objective assessment. Even so, analysts are required to travel extensively to evaluate prospective investments, their competitors and suppliers.

Detailed research
Once a company has been identified for prospective investment, it is thoroughly investigated by the analyst who will call on the resources available to Platinum. These include material from the company itself and its competitors, reports from stockbroking analysts and usually industry material. The work concludes with a detailed report being written. This is then subjected to the scrutiny of a select group of team members who meet to vigorously investigate the merits of the case. The purpose of these meetings is to expose areas of concern and potential flaws rather than to achieve a consensus. The final decision lies not with a committee but solely beween the promoter of the idea and the relevant Portfolio Manager.

The investment review will highlight very specifically the achievements that are expected from the company being proposed. These vary considerably depending on the style of company involved, but among other things, would include sales and earnings targets. Failure to meet these targets would raise concern, and notwithstanding the price action, would normally result in the share being sold. It is Platinum's experience that when targets are met or exceeded, the share price tends to overshoot expectations. Flexibility in the selling program may allow for the market's tendency to overreact.

Rewards
To ensure that each analyst's work and contribution is objectively measured, stock picks are tagged, whether purchased or proposed, and the performance thereof monitored annually. This significantly affects annual bonuses.

Portfolio construction
The process of assembling portfolios from the shares of individual companies that have above average qualities, but which are having temporary setbacks, should produce as a by-product a portfolio with below average risk characteristics. To the extent that Platinum has difficulty finding stocks that will return more than the hurdle rate, cash will be allowed to accumulate. Moreover, with the portfolio being the product of individual stock picks, it is likely to have constituents very different from traditional benchmarks like the MSCI. In other words, the geographic or industry weightings will seldom reflect those of the MSCI.