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We believe purchasing high quality companies below their intrinsic value provides our clients the tremendous financial benefits of stock ownership while also reducing risk.

Our investors’ portfolios are built on a company by company basis. Stock selection is not driven by top down macroeconomic considerations, sector allocation, or an attempt to mimic an index in a particular way. Our portfolios are concentrated and have relatively low turnover. This approach requires only a few new investments each year and demands deep conviction in each.

Identify

We seek out companies that hold unique positions in attractive industries. These companies possess advantages in their field of business that should allow them to generate high returns on assets, abundant free cash flow, and protection from price competition. Generally, we focus on mid to large capitalization companies domiciled in North America.

Once a company is identified, we begin our extensive research. This work may take months.



Evaluate

Scrutinize, and generally meet personally with, the top executives of each company looking for the set of characteristics that we believe are required for sustained business success and an accompanying build-up of shareholder wealth.

We expect to own our companies for many years and we believe management is a significant factor of future success. Before making an investment we review company leaders through research and personal interviews.



Invest

A company is purchased only after it passes our extensive qualitative assessments and it is available at a price we expect can deliver a satisfactory return.

We make an estimate of each company’s intrinsic worth based on an evaluation of its asset values, estimated future cash flows, and management team. This estimate is independent of its stock price and is determined by its relative attractiveness compared to alternative investment vehicles and to its own trading history. We will not purchase a security unless it is available at a discount from our estimate of value that is great enough to provide a meaningful margin of safety and the prospect of a satisfactory return even if our optimistic assumptions fail to materialize.