Our overarching investment philosophy is that buying a dollar’s worth of assets for less than a dollar can enhance long-term returns while reducing the risk of capital loss.  Thus, we concentrate our efforts around the calculation of the intrinsic economic value of a company, rather than attempt to forecast what other investors may pay for the company's stock in the future.  Historical experience has shown that the market will eventually recognize a stock's true value.

We prefer to buy great businesses at average prices and good businesses at below-average prices. We generally avoid average or below-average businesses. Some characteristics of good to great businesses are:

• Sustainable competitive advantage
• High returns on capital
• Low debt and off-balance sheet liabilities
• Low capital needs
• Growth potential
• Proven management
• Resilience to economic downturns

Our hallmark is intensive fundamental research into the relevant aspects of a company's operations, background, and competitive landscape.  We favor primary knowledge to secondary knowledge; thus we do our own research rather than rely on the work of others, to afford us greater understanding and confidence in our decisions.

We manage concentrated portfolios, with the majority of assets in 10 to 20 investments.  We don’t like to dilute our potential returns by spreading ourselves too thin. We reduce our risks by avoiding low quality or highly leveraged businesses, and by maintaining adequate diversification.

We are opportunistic and avoid artifical constraints that don't make sense.  Thus, we have no preset limits on geography, market cap, industry, or traditional investment style boxes. The investment profession has proven time and time again that nonsensical constraints can lead portfolio managers to suboptimal decisions, as they focus too much on positioning versus a particular benchmark or comparison group, and too little on fundamental, intrinsic value.

While we avoid industry dogma, we are very disciplined in our process and decision making.  We make sure we have the crucial insights needed before making an investment, and we make sure we understand all the risks.  Risk aversion is part of our DNA.  If you had to characterize what we do in one short sentence - we look down before we look up.