Philosophy

Our approach to investment management is designed to provide solid performance over the entire business cycle. Our clients rely on us to manage their assets through the fluctuations of market cycles. We strive to outperform over the long-term through changing market conditions by maintaining a strong discipline of balance, investment grounded on appropriate investable themes, diversification, and reasonable valuations, all supported by comprehensive research.

We believe that a solid financial foundation begins with a well-balanced portfolio of core holdings. The individual securities and proprietary mutual funds we manage serve as core holdings around which we may add complementary assets, depending client objectives.

Our process is designed to address full business cycles so that our clients

• Participate in the up markets
• Protect our clients in down markets
• Excel when markets are flat with a goal of outperforming over the entire cycle

Balance

The key to this is balance. We believe stocks, bonds, and cash should all play a role in portfolio allocation strategy. Balance allows us to weather tough times. It allows investors to participate in upside while dampening the negative effects of market downturns.

Investable Themes

Our research is focused on analyzing and taking advantage of long-term investable themes. In choosing securities, our goal is to understand where we are in the current business cycle and to create a diversified portfolio of great businesses which fit our long-term themes. These themes can produce strong revenue and profit growth for those businesses that can participate. The themes currently include infrastructure build, technology utilization, emerging market consumer, energy, commodities, and selective growth.

Diversified by Geographic Exposure

We obtain exposure to growing international markets in two ways.

1. Companies based outside the US which we feel are the strong representatives in their respective industries.
2. Multi-national corporations head-quartered in the United States. These large capitalization businesses earn over 40% of their revenues and 50% of their growth from outside of North America.

Diversified by Capitalization

Our portfolios are diversified by company size, or market capitalization, which means we own large, medium, and small businesses. Today, while somewhat more than half of our stock holdings are in large capitalization companies, we are continuing to find more investment opportunities in small and medium capitalized businesses.

Asset Selection Strategies

Buy strategy indicators:

• Favorable market/economic conditions for industry
• Strong balance sheets with high cash flows which can be an indicator of a company’s ability to self-fund new projects
• Experienced & capable management team
• Market price at discount to our proprietary estimates of value

Sell strategy indicators

• Increase in market value
• Potential catalyst for recovery is no longer evident
• Deterioration of fundamentals not yet reflected in market price
• More compelling alternatives exist with better quality or larger discount to value

Our investment philosophy, supported by extensive security investment research, drives the selection process. We look for growing companies which fall into our investable themes. We strive to purchase them at reasonable prices with a goal to outperforming over entire business cycles. We believe that this produces an attractive risk-adjusted return for our clients.

[ top ]