Managing your assets

After three decades of managing other people’s money we have learned these fundamental truths:

  • Own good companies managed and owned by good people.
  • Learn most about a company’s equity by researching its debt.
  • Own the number one or two companies in an industry; even though some may be out of favor currently, these are strong companies that will come out of the cycle first and fast.
  • Find entry and exit points by monitoring long term cyclical patterns. In fact our average holding is four years.
  • Long term is just what it indicates…we make only one or two fundamental changes per year at most.
  • Build well-diversified portfolios based on meaningful positions—we do not believe portfolios need hundreds of positions.
  • Know what you own; understandable investments that clients understand too.

In-house research is done daily

Most of our days are spent reading SEC filings, following news flow, calling management, interviewing vendors, distributors, and customers of publically traded companies. We add our thinking about behavior patterns, and looking at how this impacts an industry within the economy to find the best values.

Inefficiencies are key

Inefficiencies create wealth and efficiency eliminates wealth. The market gives us many opportunities to identify companies that are priced incorrectly. We determine when to risk capital with securities that are inefficiently priced and balance that risk against our potential reward.