Investment Philosophy

In conjunction with independent research and a disciplined process, we believe strong performance is rooted in a sound investment philosophy.



The stock and bond markets are more than markets for just financial instruments. They are markets of fear and greed, hopes and dreams, expectations and disappointments. Biases and emotions affect all of us and we believe that in order to be successful, we must cut through the noise and seek the truth. It is for this reason that we have a disciplined process that we diligently follow. Our investment process is the central pillar which guides us in the search for the truth. It is our compass in a confusing and volatile world and it allows us to generate results in a consistent and repeatable manner.
The investment process consists of six fundamental criteria with which we evaluate potential investments: companies with strong competitive advantages, returns generated in excess of their cost of capital over an economic cycle, stable or growing free cash flow, sustainable balance sheets, proven management, and trading at a discount to our estimate of their intrinsic value. Securities that do not meet these criteria will not make it into our portfolios.


In order to beat the benchmark, we have to be different than the benchmark. Our portfolios are comprised of securities that have met the criteria outlined in our investment process. The portfolios are constructed in a manner that offers the highest return, while balancing the downside risk. We are patient long-term investors and we are comfortable holding excess cash in the absence of suitable opportunities. Being different from the benchmark may entail periods of underperformance; however we have confidence that our portfolios will outperform over time. We are different than the crowd because that is in the best interests of our clients. 


We know that every investment has both an upside and downside. Before making an investment, we ensure that with all things considered, the odds of making money far outweigh the odds of losing money. Furthermore, once we decide to invest in a security, we weight it in the portfolio in a manner that is commensurate with its risk and reward profile.  We then monitor our holdings against their original theses, ongoing operational performance, and targeted intrinsic value.
Seeking the truth also means recognizing that sometimes we may be wrong. While price volatility does not scare us, we have to be open-minded in admitting that the original thesis for owning a security may have broken. Understanding how a company works and whether it fits the process is only half the battle, the other half is understanding why. It is this understanding of the why that allows us to determine whether the security’s price has temporarily disconnected from its underlying fundamentals or whether the original reason for owning it is no longer valid.  If it is the latter, we will be decisive and eliminate it from the portfolio.