Equities (stocks)

Our guiding principle is that significant wealth is created by long-term investment in undervalued securities of companies with strong competitive positions, powerful cash-generating capacity, solid finances, competent and honest management, and attractive growth opportunities.

The approach is skill-based, disciplined and consistent. We do not subscribe to popular strategies based on short-term trends such as earnings momentum or earnings surprises, choosing instead to emphasize rigorous, direct evaluation of the economic fundamentals of a business.

The Businessperson’s Approach

1. Buy outstanding businesses in growing industries
2. Invest only in companies whose business we understand
3. Focus on predictible, excess cash-flow generation
4. Do not follow the stock market herd

Our Strategy to Minimize Risk

1. Diversify over a spectrum of good businesses
2. Apply knowledge that exceeds standard parameters
3. Lock-in a valuation buffer, or discount to intrinsic value

Fixed Income (bonds)

Employing a total-return approach, bond portfolios are constructed to maximize after-tax returns.

Credit Quality: We emphasize investment-grade securities. Using financial analysis skills, we look beyond the standard quality ratings to better appraise the outlook of the issuing company. The goal is to assure that risk is quantified, appropriately rewarded and consistent with the fundamental outlook of the issuer.

Maturity/Duration: Generally, we invest in maturities of 10 years or less, with the interest rate forecast determining the most favorable position on the yield curve.

Sectors: Within a broad universe of government, municipal and corporate debt, we seek attractive values to optimally serve each client's tax status and investment goals.

Adding Value While Reducing Risk

1. Focus on investment-grade quality
2. Calibrate maturities
3. Evaluate sectors for optimal results
4. Operate with low fees and low transaction costs