Our Investment Philosophy
WE VIEW STOCKS AS BUSINESSES
“Price is what you pay; value is what you get” – Benjamin Graham
The foundation of our approach is investing in companies that are priced by the market at a significant discount to their business value. We think about investing as the purchasing of companies rather than the trading of stocks. What matters in the long run is a company’s underlying business performance and not the investing public’s fickle opinion about its prospects in the short run.
WE ARE "BOTTOM-UP INVESTORS"
We focus on individual companies and do not attempt to guess the direction of the economy. The essence of “Value Investing” is to know the company’s intrinsic worth because we believe the market will sooner or later recognize this. Markets are risky, good businesses are not.
WE ARE NOT MARKET TIMERS
“Far more money has been lost by investors trying to anticipate corrections, than lost in corrections themselves” – Peter Lynch, Author, Legendary Investor
We are patient, long-term investors and recognize that the market’s reaction to short term events can produce large swings in a stock price that are unrelated to the long-term prospects of the company. We look for such swings when they produce an attractive entry for a good business. Our approach takes out the guesswork of short-term price movements and focuses on what we believe is most important – building and compounding long-term wealth.
WE VIEW RISK AS PERMANENT LOSS OF CAPITAL - NOT PRICE VOLATILITY
We look at volatility as an opportunity and not a risk as we attempt to “price” and not “time” our investment decisions. We do not view market volatility as risk, we welcome volatile prices. We believe such price behavior affords us opportunity for long-term performance. We view risk as a permanent loss of capital. We buy stocks when they fall below what we believe their intrinsic value and remain patient until the market recognizes this value.