Several important concepts inform our investment philosophy and form the foundation upon which we confidently invest our clients’ assets:

• Intrinsic Value – We believe a stock’s worth is best determined by the underlying business’s long-term economics, not by what others are willing to pay in the short-term.
• Margin of Safety – We determine an investment’s margin of safety by the combination of the quality of the underlying company and the discount from a conservative appraisal of intrinsic value offered by the price.
• Long-term Time Horizon – We focus on achieving the best possible safe compounding of capital over a period of many years rather than managing short-term volatility of returns.
• Rational and Disciplined Execution – The market occasionally misprices securities for behavioral reasons. These arise due to market participants reacting to developments emotionally rather than rationally and to some market participants’ misaligned incentives. By remaining rational and disciplined in managing our portfolio, we can take advantage of the market’s mistakes while guarding against mistakes of our own. 
• Concentrated Portfolio – We seek investment opportunities that combine a company of high quality with a price that is at a material discount to intrinsic value, which arise only infrequently. After constructing a portfolio where being wrong on any single judgment should not result in a material loss of principal for the portfolio as a whole, additional diversification is more likely to increase rather than reduce risk by forcing the inclusion of increasingly inferior investments.