Investment Philosophy

Price and Value are not the same thing

The market is inefficient and frequently prices companies above or below their intrinsic value. We seek to profit from this inefficiency by doing our own analysis of the financial strengths, management, competitive positions, and assessments of future earnings potential of our companies. Successful investing is predicated on buying stocks at a discount to underlying value.

Stocks represent ownership in a business

Warren Buffett once said, "I am a better investor because I am a businessman and a better businessman because I am an investor."  Our investments represent more than just pieces of paper or stock symbols. They represent ownership in companies and we strive to act accordingly. Just like competent management, we focus on understanding the fundamentals of the business, its ability to generate cash flow and ultimately increase shareholder value. Our analysis takes into account both quantitative and qualitative factors.

Concentrated Portfolios

In 1934 the famous economist John Maynard Keynes wrote in a letter to a friend:

"As time goes on, I get more and more convinced that the right method of investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think one limits one's risk by spreading too much between enterprises about which one knows little and has no reason for special confidence."

We agree and limit our portfolio to roughly 20 companies.

We are long term investors

We seek to enhance the long-term purchasing power of both principal and income. Our time horizon when purchasing a company is usually 3 to 5 years, which is reflected in our low portfolio turnover. Our investment approach is designed to capture upside market growth and protect against downside risk.