Philosophy
We're value managers. We prefer to buy assets that happen to be out of favor and are trading at good prices. Assets go out of favor because of behavioral biases, and this causes the stocks to be off the radar screen of many large investors. We utilize a fundamentally based, research intensive, bottom-up approach to select the stocks that are most likely to get back on the radar screen of the mainstream investors.
Approach
We aim to remove emotion from the process.
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Stock screens generate the ideas, with a leaning towards asset intensity in order to protect downside
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We use many different valuation approaches, but we prefer companies that can generate cash
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We will review several scenarios
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Constantly looking to understand companies better in order to generate better model inputs
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We own deeply undervalued securities with tremendous upside
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Research
Research drives the investment process. Research gains it's strength from:
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Experience
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Independence from outside "Groupthink"
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Team cohesion and support
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Consistent adherence to Value principles
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Use of advanced modeling where called for
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Review mistakes as a team, and everyone gains from the experience
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Process
Our repeatable and rigorous process aims to earn the trust of clients. Steps include:
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Identification
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Confirmation
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Construction and Monitoring
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Sell Discipline - we will trim or sell if we find that our timing on a security is not right.