"Patience, experience and due diligence are competitive advantages in the investment world."
We spend our time searching for terrific companies that trade for discounts to their long term value, and we expect to own them for long periods.
We've practiced this effort for nearly 15-years as an award-winning analyst in public equity (CSFB and BMO Capital Markets), private equity and as a personal investor for more than 20 years.
Our process begins with three questions: "What problem does the company solve, how much is that worth and what protects it from competition?" Sometimes the answers aren't as obvious as they seem.
The next step is traditional financial analysis, but anyone with a facility for Excel and a desire to read public filings can do this.
The essential ingredient is to deeply research your investments – speaking with customers, competitors, and managers – to get to know the businesses as if we were its owners; as investors, in fact, we are.
Thoughtful analysis requires serious contemplation. We think about what can go wrong and what needs to go right. We like it best if we can win even when not a lot goes right. This is the margin of safety.
Some investments are distressed temporarily, some are simply overlooked by the market, and some are influenced by brilliant investors whose coattails we can ride to success. Understanding how management's goals and strategies align with your values is critically important as well.
Since terrific well-managed companies are rare and unusual, and therefore tend to appreciate over time, when we find good companies, we don't diversify and we don't sell for small gains. Rather, we concentrate and aim to hold your investments for long periods.
We call this patient approach our "1,000-Day Portfolio," because three years is the minimum appropriate time frame to consider an investment. We update our clients every 100 days.
Of course, sometimes value is recognized more quickly than expected, but we always go in with a long-term mindset since patience, experience and due diligence are competitive advantages in the investment world.