Investment Philosophy

Our philosophy, proven over the past 30 years, is that adhering to a strict and independent investment discipline, regardless of market conditions, helps minimize human emotion and should yield favorable long-term results. Independent thinking and a conservative value orientation are at the core of our beliefs.

To implement these core principles, we use an investment process focused on company specific fundamentals. We rely on income statements, balance sheets, and statement of cash flows, not macro factors like interest rate trends or economic forecasts.

To ensure an objective analysis, we use our proprietary Fundametrics® computer-based research system, which screens thousands of stocks and ranks them according to specific valuation criteria. We augment this system with a disciplined, qualitative review to assure that analyst estimates and management objectives are reasonable.

The principle of “regression to the mean” is at the core of our philosophy. This principle often steers us to stocks or sectors tinged with fear or doubt, where investors have discomfort. We strive to find stocks that are either out of favor but exhibit attractive fundamentals or that have a collection of strong fundamental characteristics to support long-term price appreciation. This philosophy also steers us away from stocks that have a high probability of being lavished with greed and unrealistic expectations.

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