The Fund

We believe the best approach to investing in the stock market is based on identifying strong businesses, evaluating what these companies are worth and then buying the stock of these companies when they are priced at a discount to their intrinsic value. The attraction of this approach is based on the timeless nature of its applicability.

While we bring our own take on the best way to evaluate investment opportunities and construct portfolios, the core of our process is the same essential approach used by many of the truly great investors over the last century. We think this will be the approach used by many of the truly great investors over the next century as well. While various styles of investing come in and out of favor, buying great companies at compelling prices based on the amount of cash earnings they can return to shareholders over time, is a common-sense approach that has worked over the long-term. It is an easy to understand but difficult to execute task and one on which we focus all of our time and energy.

We are business analysts, not stock market speculators. We spend our time learning as much as possible about the industry trends, competitive dynamics and customer demands that give rise to intrinsically valuable companies. We put our shareholders’ capital to work based on extensive analysis of the specific businesses in which we invest.

Importantly, we think that all investments that create cash flow have an intrinsic value that is distinct from the price set by the market. Investments like artwork, gold and other commodities do not have this same type of intrinsic value. They are instead worth exactly what people are willing to pay for them. Investments such as bonds or stocks, which generate cash flows, are valuable even if there is no market in which to sell them.

While market prices frequently are a good approximation of an investment’s intrinsic value, the key to long-term performance is doing the deep research required to identify those instances in which market value deviates from intrinsic value. Identifying and exploiting these occasions of market mispricing is the focus of our investment management process.