Investment Process

As the stewards of our shareholders’ capital, we focus on preservation of capital first and foremost. This discipline has led us to invest in securities where we believe the potential price depreciation is limited and the potential upside is substantial. To identify such investments, we conduct a thorough, bottom-up analysis of a company’s financial statements, business model, and quality of management. When we invest in companies, we do so with a long-term time horizon; we are not traders speculating on short-term moves. Rather, we view our investment commitments as if we were purchasing the entire company rather than a small minority stake. The fundamental characteristics of our investment process include the following:

  • We consider the strength of the economy and overall market conditions, but we are ultimately bottom-up rather than top-down investors.
  • We seek out quality companies with healthy balance sheets, positive cash flows, solid business models, and strong management.
  • We tend to be contrarian investors by purchasing stocks of companies that we believe are only temporarily out-of-favor.
  • We search for responsible management teams that are focused on delivering long-term value to their customers.

If a company meets our criteria, the Fund’s portfolio managers vote on whether to buy the stock. We will only purchase a stock if it receives approval by three out of three of our managers and is priced below our buy limit.