Our investment philosophy depends upon three interrelated tenets: patience, focus and independent thinking, which drive our contrarian approach. Our divergence from conventional wisdom allows us to add value by taking advantage of the market’s few and small pockets of inefficiency.

A Patient View

• Compels us to wait for the perfect pitch—differentiated companies with strong cash flows, low debt, high quality products or services, significant barriers to entry and low reinvestment requirements.
• Allows us to take a long-term view and look past short-term noise with a 3-5 year time horizon in mind.
• Permits us to use the market’s short-term thinking to our advantage since our longer term approach allows us to be opportunistic as price dislocations arise.
• Enables us to take our time to research a name and wait as long as necessary for it to possess the margin of safety we require.
• Leads us to build an extensive collection of contacts that inform our stock picking.

A Focused Approach

• Allows us to build expertise and accumulate deep knowledge.
• Augments our conviction, especially during crunch time when it matters most.
• Enables us to learn from our mistakes and make fewer of them.
• Leads us to isolate key issues of importance to a company in the midst of market noise.
• Results in our portfolio concentration in a limited number of names and industries.
• Allows us to build and cultivate independent sources more effectively.
• We don’t own a little bit of everything because we can’t know everything—we choose to go deep instead of broad.

A Team of Independent Thinkers

• Encourages us to buy out of favor, misunderstood and ignored stocks.
• Compels us to buy when others are selling and to sell when others are buying.
• Leads us to perform our own original, proprietary research.
• Persuades us to be benchmark agnostic with very different industry weightings.
• Permits us to take advantage of market psychology.