As the stewards of our clients’ investable capital, we focus on preservation of capital first and foremost. This discipline has led us to invest in stocks where we believe that the potential price depreciation of a stock is minimal and the upside is considerable. To identify these stocks, we conduct a thorough, bottom-up analysis of a Company’s financial statements, business model, and quality of management. When we invest in companies, we do so with a long-term time horizon; we are not traders speculating on short-term moves. Rather, we view our investment commitments as if we were purchasing the entire company rather than merely a small minority stake. Some of the fundamental characteristics of our portfolio management process include the following:
- We consider the strength of the economy, the overall direction of the market, but we are ultimately bottom-up rather than top-down investors.
- We place intense focus on the risk side of the investor equation, not just on the potential upside.
- We seek out companies with healthy balance sheets, positive cash flows, solid business models, and strong management.
- We tend to be contrarian investors by purchasing stocks of companies that we believe are only temporarily out-of-favor.
- We look for companies that have an intense focus on delivering long-term shareholder value.
- We manage tax-efficient portfolios and therefore minimize portfolio turnover, typically holding investments for 3-5 years.
- We search for management teams that are focused on delivering increased value for shareholders.
