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| We Think Independently |
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We try to be skeptical of conventional wisdom and try to avoid the waves of irrational behavior and emotion that periodically engulf the equity markets world wide.
We do not ignore unpopular companies; on the contrary, such situations often present the greatest opportunities. We prefer to invest in high-return businesses that are run for the shareholders. Over the long run, appreciation in share price is most directly related to the return the company earns on its shareholders' investment.
Pay only a reasonable price, even for an excellent business. We always look for a margin of safety - that is the discount to intrinsic value. Even the world's greatest business is not a good investment if the price is too high. Buying the right stock at the wrong price will produce unsatisfactory or even negative returns. Invest for the long term. Attempting to guess short-term swings in individual stocks, the stock market, or the economy, is not likely to produce consistently good results. Do not diversify excessively. The more diversification, the more performance is likely to be average, at best. We concentrate our investments in a few companies that meet our investment criteria. Good investment ideas - that is, companies that meet our investment criteria - are difficult to find. |