Equity Philosophy

We invest with long-term intentions. We believe stock prices are influenced by market volatility in the short run, but are more correlated with company fundamentals and earnings generation in the long run. Over an extended period of time, volatility is reduced and companies can better demonstrate their business plans and operating strategies.

Our methodical approach to equity investing focuses on high quality companies, with favorable outlooks, and attractive stock valuations. Over time we believe our penchant for value, conservative approach, and portfolio diversification practices can mitigate overall risk and generate attractive returns across market cycles.

Buy Discipline

Sell Discipline

I. We Buy Quality:
Our focus is to buy high quality companies with hard to replicate yet sustainable business models, strong balance sheets, and good long-term growth prospects.
I. Thesis Changes:
We sell if there are changes to the fundamental principles that attracted us to the stock.
II. Price Paid Is Important:
We place great importance on valuation and seek stocks trading below historical valuations and our conservative estimate of intrinsic value.
II. Return-Risk Turns Unfavorable:
We sell if an investment’s valuation becomes stretched beyond a justifiable level.
III. Favorable Outlook:
We look for stocks with multiple catalysts such as improving free cash flows, efficient capital allocation plans, value accretive restructurings, rising margins, and increasing profits.
III. New Risks Emerge:
We closely monitor risk and will sell shares if unacceptable risks emerge, or if the company’s future prospects begin to deteriorate.