We believe that our investment philosophy distinguishes us from most advisors and investment firms. Most advisors' investment approach is premised on passive strategic asset allocation. That is, they will allocate a client's portfolio in a broad selection of mutual funds based on the size of the companies invested in and management styles. Many advisors express that they use this approach, because the "diversification" adds an extra measure of safety. This may be the case, but few funds outperform the S&P 500 and those that do only manage to outpace it slightly. If you add the frictional costs of fund ownership, many investors using this style may actually under perform the market benchmarks over extended periods of various market environments.

Our approach is significantly different.

Our investment philosophy is based on 5 pillars:

  • Process
  • People
  • Portfolio
  • Down-side Protection
  • Performance

Process – This is the first pillar, because it is the most important.  We look for portfolio managers and research analysts that have a clearly defined process.  The process must be repeatable and teachable.  We also look for a process that may evolve over time, but doesn’t change much in the short term.  If we can’t understand the research process, we would end the due diligence research at this step.

People – We want people that have a high conviction in themselves and their firm.  Finding investment managers that “eat their own cooking” is a must.  This means that they must have a substantial portion of their own net worth in their firm’s investment products and/or the ownership of their firm.

Portfolio – We look for portfolios that are unique and different from the market.        Some unique qualities could include: a broad investment mandate (being able to invest across market capitalizations and globally), a concentrated portfolio of 15-20 positions, or the ability to make tactical decisions based on changing market conditions.

Down-side Protection – We are willing to “give up” some of the upside gain for a strategy that attempts to protect capital in down markets.

Performance – Lastly, we look for managers that have provided excellent long term performance.  We would want to see performance over several market cycles (8-10 years).