Philosophy

We believe that long-term investment opportunities can be systematically identified. We seek opportunities in which a quality business experiences a dislocation between the stock price and fair value. The portfolio construction process has been structured around these philosophical tenets:

  • Investment Anomalies: Three market anomalies related to Valuation, Quality, and Market Reaction have historically outperformed the market over long time periods
  • Margin of Safety: Buying a stock below our estimated fair value presents a margin of safety, which can help reduce the risk of loss in an investment
  • Risk Control: We consider risk to be the permanent destruction of capital not academic measures of variability
  • Concentration of Capital: Concentrated portfolios that are meaningfully different from their benchmarks present opportunity to outperform
  • Ownership Mentality: We view our investment as a long-term ownership stake in the underlying business
  • Patience: As the world has become more myopic, a long-term mindset may help present investment opportunities