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Public Equity

Our number one mission is to preserve investment capital. Our second mission is to compound investment capital at high rates of return over the long term. Our default investment is cash, and we allocate cash to opportunities according to their margin of safety and expected return, rather than any predetermined commitment to asset class, sector or investment discipline. Our expertise is in discovering competitive public companies which are selling at a significant discount to intrinsic value and we have developed our proprietary research and screening tools for identifying under-followed, undervalued companies.

Focus on Long-term Compounding of Wealth

We invest for the long-term and consistently strive to maximize our after-tax returns and minimize permanent loss of capital. Our preferred strategy is to invest for the long term in superior businesses and managers in both public and private markets.

Business-like Investing

We are investors, not speculators or traders. As investors, we attempt to profit from the growth of the assets we own or the cash flows derived from those assets. In contrast, speculators and traders attempt to profit from fleeting changes in prices. As owners of businesses whose earnings power is protected by durable competitive advantages, we can remain patient – even opportunistic – in the face of short-term price volatility, confident that, in the long term, price correlates with value. In the words of Warren Buffett, "Time is the friend of the wonderful business, the enemy of the mediocre".

Private Equity Approach

We use a private equity approach to public market investing. We invest in a company under the premise that the capital markets may not be available for a meaningful period of time and thus expect to earn an attractive absolute rate of return from the cash flows generated by the business and reinvested by management. Unlike most investment industry practitioners, we do not equate risk with volatility. Rather, we assess risk as the likelihood of permanent capital impairment. We will purchase shares of a company only after we have formulated a solid opinion of its intrinsic value and only if the price is below that value. We call this difference (between price and true value) the margin of safety. Unless we can quantify it, we do not buy.