Philosophy

We believe the path to wealth creation and capital preservation lies in the purchase of quality companies at a discount to fair value with a multi-year holding period in mind at the time of purchase.

  • Quality Matters: Companies with a proven business model (longevity, market share, and innovation) , a multi-year track record of profitability, attractive returns on equity and assets, as well as free cash flow production combined with a sustainable capital structure tend to thrive in the long-run and consistently pay dividends.
  • Purchase at a Material Discount: Satisfactory investment returns are the product of purchasing assets at a 25% or higher discount to their fair value. If we can’t find stocks meeting this essential criteria, we believe cash and patience are better alternatives to investments that offer little upside.
  • Downside risk protection: We believe the two biggest risks in equity investing are the permanent loss of capital and the failure to maintain an adequate allocation to the asset class. The best test of an investment strategy is in substantial market downturns, both in terms of portfolio performance and commitment to the strategy.
  • Meaningful Allocations to Best Ideas: We believe a limited number of high quality investment ideas produce better long-term performance than a larger number of marginal investment ideas and we therefore manage portfolios of between 20 and 40 holdings.