Core Investment Beliefs

When investing, we view ourselves as business analysts – not as market analysts, not as macroeconomic analysts, and not even as security analysts.

— Warren Buffett

We have a strong belief in the merit of our investment approach. While Wall Street is a competitive industry with a host of views on investment management, we have not found any persuasive line of reasoning that contradicts our core investment beliefs. Warren Buffett outlined the three key failures that cause investors to find failure instead of success:

High costs, typically as a result of excessive turnover and overpriced investment products

Because our incentives our aligned with those of our clients, we focus on managing tax-efficient, low cost portfolios. This includes low portfolio turnover and the avoidance of overpriced, inefficient investment products.

Investment decisions based on “tips and fads rather than on thoughtful, quantified evaluation of businesses.”

The bedrock of our approach to investment management is our fundamental, independent research of individual businesses and securities. We are first and foremost business analysts. We avoid top-down decision-making, instead relying on bottom-up research that is more accurate, observable and actionable. We try to limit our activity to our circle of competence, only doing things that we understand. We always look for a margin of safety – a discount to a conservative estimate of intrinsic value.

A “start-and-stop approach to the market marked by untimely entries and exits.”

We believe that it is generally impossible to time markets. Attempts to do so have increased investor risk and been met with poor results. We focus on long-term value and deviate from our strategic portfolio allocation targets only when investment markets present unusual opportunities. We try to “be fearful when others are greedy and greedy when others are fearful.”