Value Investing Works

  • We believe buying a few, discriminately chosen operating businesses at a discount to intrinsic value is a sound method for making money
  • We believe buying businesses with a margin of safety protects capital
  • Investing in a circle of competence can mitigate risk and enhance returns

Compounding Creates Wealth

  • Compounding presents asymmetrical risks and rewards; we believe long term oriented investors should focus on harnessing its positive exponential payoffs and limiting its negative impacts
  • A penny saved is a penny earned, but when investing capital for the long term, it can be far more

Volatility Is Okay; Permanent Loss of Capital Is Not

  • Risk is the likelihood of incurring a permanent loss of capital and has little to do with how much an asset’s price fluctuates over short time intervals
  • Drawdowns are a step towards impairment of capital, dilute buying power and should be minimized
  • Leverage amplifies the negative impacts of drawdowns and we believe should be avoided

Markets Reward Progress and Are Biased Upwards Over Time

  • Entrepreneurs and business owners are incentivized to pursue financial reward and create durable enterprises attendant with economic growth
  • Americans’ desire to improve their fortunes makes continued progress likely over time horizons of sufficient length

“Investment is its most intelligent when it is most businesslike”
– Ben Graham