Investment Philosophy

We make long-term investments in strong businesses within attractive industries. These enterprises must have sustainable competitive advantages, consistent patterns of growth, strong profit and cash flow characteristics, solid balance sheets and proven management teams.

We find these companies through a process of extensive primary research. This entails regular meetings with numerous company managements that lead to a thorough understanding of the underlying businesses within each enterprise. Valuation also plays an important role in our analysis, since paying too much for even a great company can lead to a poor investment.

Company fundamentals and valuations drive portfolio construction and sector weightings. We do not chase constantly fluctuating macro or economic opinions. Portfolios are composed of attractively valued companies that demonstrate the ability to grow earnings and cash flow at above average rates. Over long periods of time, earnings growth drives stock prices and dividends. Our focus is on the long term because the direction of stock prices in the short term is unknowable.

To control risk, our portfolios are diversified across economic sectors and stay fully invested. In our opinion, market timing is a fool's errand.

Our extensive research generally allows us to hold companies for an extended period of time. This low turnover is a natural element of our investment work, and it is particularly appropriate for taxable accounts.

Fixed Income

Client assets are invested in bonds with an eye toward capital preservation and a steady stream of income. The core portion of a client's fixed income portfolio is not an appropriate place to take significant risk. We implement a conservative, common sense approach to fixed income investing by building a laddered, medium term, high quality portfolio. This strategy seeks to minimize credit and reinvestment rate risk for our clients.

Our approach to fixed income analysis is similar to the one we employ with equities. We concentrate on the health and sustainability of the underlying government entity or company rather than relying on rating agencies or credit insurance. Because we intend to hold the bonds until maturity, quality is important.

Alternative Assets

Alternative assets can offer greater potential for investment returns as well as diversification where appropriate for eligible clients. We have developed a platform through which we can offer our clients access to a carefully selected group of private equity, venture capital, high yield, real estate and commodity funds. We perform extensive due diligence and look for managers who carry the same high standards as we do in our public company investments.

We allocate capital to these asset classes only when we feel the valuations are particularly compelling; diversification for its own sake can be detrimental. As well, we are sensitive to the illiquidity of many of these sorts of investments and, so, are more demanding of those we select. Further, we limit our investments to funds that charge a fee we believe to be reasonable.