The Approach
Mission to Provide Superior Returns
Over the Long-Term.
Inherent in our approach is the belief that the market price of a security does not necessarily indicate its true economic value.
We identify and research companies with solid balance sheets, the ability to generate significant amounts of free cash flow; and yet are misunderstood, neglected, or just out-of-favor with Wall Street.
Striving to exploit the inefficiencies of an ‘efficient market.’ This contrarian style means investing opposite from the market, and attracting the right clients is of paramount importance.
Having clients with a temperament consistent with our own is necessary for applying this investment approach effectively. This enables the inclusion of smaller, under-followed companies where market inefficiencies are more likely to appear, along with larger capitalized companies.
“The plans of the diligent lead to profit
as surely as haste leads to poverty.”
Proverbs 21:5
Investing
Price vs Value
The market price of a security does not necessarily indicate the true economic worth of a security. The price you pay is not always the same as its value.
Value Investor
Striving to generate long-term returns by identifying and investing in securities where the asymmetry between market price and the estimated intrinsic value provide opportunity for capital appreciation.
Research Driven
Generating ideas from a wide range of sources screening, reading widely, attending conferences and leveraging like-minded investors. Investment generalist working within a developed circle of competence across industries and situations.
Contrarian View
Avoiding the herd mentality recognizing that market participants are humans and driven by emotions. Identifying companies facing near-term headwinds where the issues are temporary and when cleared will have a runway for growth ahead.
Behavioral Advantage
Overcoming emotions and reacting calmly and rationally to new information and price changes. Being able to tolerate market volatility and going against convention and human nature is an edge.
Interests Align
Having skin in the game is important and finding companies with insider ownership assures our interests are aligned. Similarly, our interests align with our clients. We invest alongside our clients, we win and lose together.
Business Owner Mindset
We buy businesses, not pieces of paper. Stocks represent ownership in real businesses. Purchasing shares of a company literally makes us owners of a fractional piece of that business. Focused on understanding the underlying economics and practical operations of that business in the same way a business owner would.
Valuation &
Margin of Safety
The economic worth of a company and understanding the normalized free cash flow prospects of a business is paramount. Comparing the market price to the valuation allows for a margin of safety. Insisting on purchasing a company below its economic worth and future prospects limits the potential for losses.
Long-Term
Investing
Behavioral advantage stems from the long-term mindset. Business owners do not check the value of their company on a daily basis, nor do homeowners check the daily price fluctuations of their homes. We pay attention to daily fluctuations for the opportunities they might provide. Framing our analysis on results and how they will affect earnings power of the business over 3 to 10 years.
Trading
Trading for Alpha
In addition to our long-term investing approach, we seek short term trading opportunities to generate alpha for the portfolio. Our research and valuations provide for trading opportunities utilizing derivatives in companies we would like to own long-term.
Systematic Trading
For clients who are interested we offer a proprietary quantitative and technical systematic trade. The trade is executed at the discretion of the Managing Director.
Attorneys
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Karin Burrows
Founding Partner
William Laboy
Co-Managing Partner
Paul Hoff
Co-Managing Partner
Louise Andre
Senior Partner
Jackie Davis
Partner
Clifford Griffith
Lawyer
Eduardo Brewer
Lawyer
Alejandro Ringler
Lawyer