Investment Approach

image

“It is impossible to produce superior performance unless you do something different than the majority.”
– Sir John Templeton

Behavior Matters

  • In our experience, investment markets are often volatile and occasionally irrational in the short-term.
  • These short-term market fluctuations can provide occasional investment opportunities to rational and disciplined investors.
 

Independent Thinking

  • Many firms separate research from portfolio management. Our professional investment managers engage in both: in-house, original investment research and portfolio management.
  • We believe this integrated approach leads to a greater understanding of opportunities and risks, and stronger conviction in the investment portfolio, especially during volatile markets.
 

Long-Term Horizon

  • Investments usually take years to produce significant results. Our willingness to wait patiently for opportunities and stay focused on long-term results stands in contrast to the frequent short-term thinking of many market participants.
  • While we remain focused on the long-term, we strive to continually monitor, review and adjust our holdings to create better opportunities in changing market conditions.
image

“I can calculate the motion of heavenly bodies, but not the madness of people.”
– Isaac Newton
 

Strict Investment Discipline

  • A good company can be a disappointing investment if too much is paid to acquire it. Each new security considered for our portfolios must meet our rate of return expectation. If it does not, we won’t invest.
  • We strive to be just as disciplined in selling securities – at too high a price, even a good company is not always a good investment.
 

Tax Efficiency

  • We carefully evaluate the tax impacts of portfolio changes.
  • As appropriate, we purchase municipals and other tax-advantaged bonds that can generate income exempt from state and/or federal income tax.
  • We work closely with your tax adviser to gain a comprehensive understanding of your financial and tax profile.
 

Risk

  • As business analysts, we view risk not as market volatility, but as the probability of permanent business value impairment.
  • When we identify quality businesses run by “owner operators” and purchase them at bargain prices, the risk of permanent losses should be meaningfully reduced.