We minimize investment risk by investing in high quality companies, and buying them at a discount to their intrinsic value.
We search for investments that have demonstrated fundamental growth through various market cycles. Our preference is for companies with long operating histories and high return on equity.
The price of a stock does not always reflect the value of the underlying business. This gap between price and value creates profit opportunity and reduces risk, acting as a margin of safety.
Making consistently successful macro forecasts or predictions is impossible because the future is inherently unknowable. Understanding market history can provide useful information with which to compare the present. We concentrate on knowing businesses, which are more predictable than broad markets over the long run.
Most people are not naturally wired to be successful investors. We can overcome hidden biases and judgement errors using simple rules and evidence-based decision making.
Our goal is to remain fully invested throughout the market cycle by investing for a range of outcomes. When investment opportunities are few, we will hold more cash.
Patience is the closest thing to an investment superpower. We’re not trying to appeal to people who care about next quarter or next year. We appeal to people who view this as a lifetime investment.
