We believe that it is only through standing as far apart from the group as you can tolerate that you can hope to consistently outperform it.
Our goal is to outperform the relevant market indices over time with lower risk of principal loss than is posed by those indices. Our philosophy of calculated deviations from market norms seeks to take advantage of certain structural attributes of the market that negatively affect its results over time.
- We seek to exploit market misjudgments in pricing by buying stocks that are cheaper than they should be because of a temporary aversion to them.
- Unlike the market, which by definition is always fully invested, we are willing to hold cash—sometimes lots of it.
- We steer clear of generic “consensus” stocks in favor of those that are singular, typically ones that have a strong (but appropriate) corporate culture, thoughtful and disciplined capital management, and—critically—are in a business in which they can grow intrinsic value over time.
- Our focus is on our companies’ ability to create value over the long term. While we assimilate short-term results, we exercise discipline in not reflexively reacting to them.
- We are highly concentrated, industry and sector agnostic, and willing to double down on stocks we like when they get cheaper.