Our investment philosophy is straightforward: to use a consistent process to compound our clients’ wealth over time while taking less risk than the broader markets. Our approach is founded on four core tenets:
Common stocks represent an ownership interest in a business we plan to hold for years, not quarters. It’s very important for us to have a high degree of confidence in what a business will earn through a ‘normal’ cycle. Therefore, we think like owners and are highly biased toward quality and competitive advantages.
We fervently believe in knowing each position as though we owned the whole company – rather than relying on third party managers or Wall Street research. Rigorous analysis of each investment and asking: ‘What do we see that others do not?’ are both keys to uncovering businesses trading at discounts to their true worth.
Common Sense & Patience
We operate within a historical context and avoid fad investments. Markets can be efficient, but often become overly optimistic or pessimistic in the short run. Many investors have shorter time horizons or attempt to ‘time the market’ whereas we believe superior returns come from allowing an investment to mature and compound over time.
We believe risk is the permanent loss of capital, not volatility or temporary fluctuations in price. With that in mind, an important part of our job is to protect investors during these times by maintaining a strategic focus on the long term. We manage each investment with an eye towards a ‘margin of safety’ in terms of our estimate of what a company is worth.
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