Our Investing Process
Our unique process is rooted in reason, meticulous evaluation, and patience.
Our step-by-step process:
1
Our first filter is a stringent set of financial criteria that must be satisfied by all potential investments. There are thousands of publicly-traded securities to choose from, but our first filter alone eliminates around 95% of potential candidates, significantly improving our chances of selecting the right opportunities.
2
After we have reduced the size of our investment universe substantially, our next layer of filtering is where we assess whether we adequately understand the potential investment. If we can’t understand it, we have no business investing in it. At this point we have eliminated approximately 99% of potential candidates available on the market.
3
We then examine each investment’s financial performance throughout its history entire history, consider management’s track record of generating high returns on capital, analyze economic characteristics of the business, research comparables, and study the prospects of the investment to determine both short and long-term potential.
4
When we think we have found the right investment, our investment team rigorously evaluates each opportunity further with the goal of removing cognitive bias from our decision-making process. Through triangulation, we skeptically attempt to poke holes in our findings until our level of certainty in an investment decision is adequate. Our standard is high, and only the most conservative assumptions are made.
5
Our management team may have a strong ability to identify great investments, but if any doubt remains, we do not proceed with an investment decision. All members of the investment team must agree on a decision before any action is taken. Prior to any vote, we have reduced our pool of investment candidates to around .1% of the total investment universe.
6
At this stage, we have identified the investments that meet our financial criteria, fall within our circle of competence, and have the potential to generate satisfactory returns over the long-term. We then buy, and we keep buying for as long as the investment opportunity is priced significantly below its intrinsic value and substantial margin-of-safety exists.
In an industry with thousands of overly-complex, fee-ridden, and speculative products, we "filter" the clutter for our investors.
Bonds
Stock
RE
ETFs
Ann.
We evaluate the vast amount of financial products available to investors.
Our investing process filters out thousands of investments
into an efficient portfolio.
Stock
Bonds
We customize your portfolio to meet your exact needs and financial goals.