Investment Process
Our investment process is rigorous and embodies a culture of critical thinking about quantitative data and qualitative factors to ensure that our deployment of capital is both rational and accretive.
Our training and temperament support our reputation as capable value investors. We endeavor to understand the businesses that we own and the unit economics of the products they sell and services they provide. We are interested in management and culture. We are also interested in the strategic position of our portfolio companies and precisely the form of competitive advantage that they enjoy.
We verify earnings quality for transparency, with a view towards interpretation and ultimately, understanding. Generally accepted accounting principles (GAAP) is rarely more than a starting point. A thorough understanding is typically a function of analysis and adjustment which leads to a hybrid form of accounting that best describes the economics of the business.
We visit companies and interview managements, competitors and customers. We admire adaptive managements and seek to align ourselves with those in control positions who have both the ability and inclination to improve the intrinsic value of the businesses we own.
We buy companies at a significant discount to what we have determined to be intrinsic value. The concept of a margin of safety; the act of acquiring a valuable asset at a price significantly less than it’s fair market value, is integral to our investment process.