Our Philosophy
Our investment philosophy is grounded in the time-tested, price/value dynamic espoused by the late Benjamin Graham.
We prefer companies with characteristics not unlike those one would desire for their own privately held enterprise; understandable unit economics, strategic competitive advantage, dependable reporting and when identifiable, favorable macroeconomics. We are drawn to talented managements whose interests are aligned with ours as outside passive minority shareholders. We are attracted to sensible balance sheets, favor sustainable cash flows and cherish value augmenting reinvestment.
Our investment style has been described as value by some and growth at a reasonable price by others. We merely see ourselves as pragmatists who endeavor to buy valuable assets at a discount to intrinsic value.
We consider investment analysis a solitary and dispassionate process. We appreciate well reasoned opinion whether or not it corresponds with our own. However, we view commonly accepted wisdom and investment consensus in general, with a measure of skepticism.
We embrace the idea that markets are often efficient and reject the notion that they are always efficient. Prices of individual securities within markets frequently deviate from intrinsic value. A patient and knowledgeable investor will have ample opportunity to exploit this disparity for profit.
Our record of success has been punctuated by instances of human fallibility. Mistakes are inevitable and we make plenty of them. However, we hold dear the conviction that an independent view of the world, a consistently applied procedural discipline and a rigorous fundamental analysis implicit in the value investing approach, will limit the aggregate cost of error and provide the margin of safety necessary to compound our investment capital at a rate that considerably surpasses what one could earn through a passive approach.