INVESTMENT PROCESS
The Investment Team talks to every company before buying for client accounts. Many times discussions also take place with competitors, customers, and suppliers.
- Phase I: Initial screening of quantitative characteristics to narrow the field
- Phase II: Evaluate business relative to the investment philosophy
- Phase III: Financial analysis of the business with respect to the industry, its own history, and the future potential
- Phase IV: Price target evaluation, leading to portfolio purchase
RISK CONTROL
- Own 25 to 35 companies — allows for deeper understanding of each company
- Maximum sector weighting 35% of the portfolio, closely evaluated at 25%
- Maximum purchase size 5% of the portfolio
- Maximum position size 10% of the portfolio
- New accounts purchase positions at size of existing portfolios, even if weighting is greater than 5%
- Liquidity of individual positions and the overall portfolio are monitored closely and controlled
SELL DISCIPLINE
- Company becomes fully valued
- Better alternative identified
- Successful company grows to 10% of the portfolio
- Impairment relative to investment philosophy fundamentals
- Catalysts fail to materialize