Investment Thinking

Asset Allocation

We manage customized portfolios that align with your planning objectives. Our independent model allows us to diversify across the risk spectrum to align your planning and investment goals in harmony. We embrace proper diversification designed to withstand the test of time and winds of the market. From direct stock management to bonds…we have an expert team looking over your investments on a daily basis so you can focus on things much more important in life.

Equity Construction

Equity Construction is focused on owning a select group of wonderful businesses across all sectors. Our investment universe is overweighted toward finding businesses with long-term sustainable competitive advantages, or “economic moats.” that fall within our circle of competence.

We believe that the value of the competitive advantage is maximized when a business can reinvest capital at a high incremental rate of return for an extended period of time. As such, we seek to own solid and ideally wonderful business models with solid management at a fair price. Markets traditionally undervalue the terminal value (long-term cash flows) that wonderful businesses can provide. Owning these companies for a long period of time while the markets learn to appreciate the longstanding cash flows allows our clients a competitive edge over traditional investment firms.

Simple Philosophy

  1. They have good return on capital without accounting gimmicks or lots of leverage
  2. They are understandable
  3. They see their profits in cash
  4. They have a strong franchise and freedom to price
  5. Their earnings are predictable
  6. They are not natural targets of regulation
  7. They have low inventories and high turnover of assets (require little compulsory capital investments)
  8. The management is owner-oriented
  9. High rate of return on the total of inventories (R/D spend) + plant/equipment: (Receivables usually offset payables)
  10. The best business is a royalty on the growth of others, requiring little capital itself

Fixed Income Construction

We identify each client's need for future funds in combination with volatility tolerance.  We compliment the equity allocation with fixed income designed to reduce the liability of withdrawing funds when equity markets decline or with the purpose of using fixed income to reduce risks.

Fixed Income is constructed to primarily diversify interest rate and credit risk while still delivering an adequate return rate relative to the overall bond markets.

Interest Rate Diversification

  • Diversify durations
  • Limit credit quality risk

Credit Risk

  • Diversity credit risks with a strong tilt toward higher quality
  • Harvest higher yields to compensate for credit risk and offset any rate risks

“A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.”

- Benjamin Graham, The Intelligent Investor