Cederian Investments is a value-investing firm that has pioneered an investment philosophy called Metavaluation, which asserts that measuring certainty is the central role of an investment manager. In Metavaluation, investment decisions invoke a set of questions which are complex, epistemological in nature, and possibly unanswerable. Critical thinking rather than perceived cross-time stylistic consistency is likely to be the best approach to such an environment, so Cederian views Metavaluation as creating a contemporary value investing system instead of practicing within a traditional value investing school. Style leadership rotation over long periods of time provides support for this approach.
Cederian agrees with the key tenet of value investing–the investment firm should purchase securities when price is less than value–but rejects simplistic interpretations of the meaning (or determinability) of value. Historical multi-year security price volatility shows how often value, defined as future execution price, is materially misassessed three to five years prior by market participants acting on information available at the time. Stated another way: if markets are efficient, their efficiency is irrelevant.
Investment managers typically share similar educational backgrounds, have access to the same historical and estimate data, and use industry-standard valuation models and tools. When everyone uses a common set of tools, outperformance must come from using those same tools in a different way. Cederian’s competitive advantage is an ecosystem of proprietary tools based on Metavaluation principles that enables investing as search rather than investing as calculation. Cederian seeks to show that Metavaluation, evaluated over the long run, can provide both outperformance and performance less correlated with traditional value investing strategies.