Portfolio Management

Einstein said, “Everything should be as simple as possible, but not simpler.” We agree. Our process of spotting opportunities in areas we understand, valuing companies and buying at a discount sounds simple. And it is – to an extent. The hard part is having the discipline to keep doing it, no matter which direction the emotion of the crowd is going.

Disciplined investing

The market presents thousands of opportunities each day. But discipline is as much about the opportunities you don’t take. To continue delivering the returns you deserve, we wait for our pitch. We only act on the opportunities that are in line with our core mission of investing in what we believe are outstanding companies at favorable prices that provide a potential “margin of safety” to limit downside risk.  Our choices aren’t influenced by short-term fluctuations, but by the understanding that this discipline of value investing leads to long-term gains.

Staying flexible

Staying true to our guiding principles does not mean that we rigidly follow a formula. Rather, we remain flexible and act on what the market gives us. Stock prices fluctuate with investor emotions, but underlying business values do not change rapidly. We often take advantage of swings in investor sentiment by buying more when stock prices decline. On the other hand, we also are willing to take profits if they come quickly. While we think long-term, we act based on the gap between a stock’s price and our estimate of the business value.

Real results

Our team knows what works. Some stocks are mispriced, thanks to human nature and overreactions to market events. We don’t expect that to change anytime soon. Those mispriced assets have allowed us to deliver average annual returns that we are proud of. Click below to see our performance results.