Investment Philosophy
Equity Portfolios
We believe firmly in the long term merits of Value investing and asset class diversification. Our Investment philosophy is simple by design: we invest in companies that are attractive from a valuation standpoint and are currently under earning their long term proven rates of return. We rely on our internal bottom up research efforts to determine if the company will return to it's proven rates of return, thus increasing value, or if something fundamental has changed within the company leading to a sustained decline. Our view is that it is rarely "different this time" and companies with proven track records will right the ship. We also believe in concentrated equity portfolios limited to 20-25 holdings. This allows us to focus on the most attractively valued companies, while still maintaining diversification.
The Whole Puzzle
We put a great deal of emphasis in understanding the clients' entire financial picture. Contrary to market events where many asset classes became highly correlated and traded down in mass, we still view proper asset allocation as a way to limit overall risk. The standard way to look at asset allocation involves a proper mix of stocks, bonds, and cash. We prefer to look deeper. While our investments utilize stocks, bonds and cash, we consider other wealth resources held by our clients. These other resources include, but are not limited to, inheritance, real estate, equity in private businesses, private investments and the human capital component (or future earnings potential) when determining the investment risk profile for our clients.