Investment Philosophy

We seek to build investment portfolios that produce consistent, absolute returns, with mitigated risk and volatility. To accomplish this, we leverage a long-term horizon, aimed at capitalizing on the power of reinvested and compounded dividends from high-quality companies with distinct competitive advantages. Just as importantly, however, these companies exhibit strong dividend cultures that respect minority shareholders’ interests through a durable and rising stream of distributed profits. The combination of these factors leads us to businesses that create long term economic value - while being wise stewards of capital - resulting in the consistency we seek over time with lower levels of volatility and risk.

Four philosophical tenets underpin our view of markets and investments:

• The income component of equity returns - the contribution and reinvestment of dividend income - has been a profoundly large element of overall returns through history yet remains largely underappreciated by most investors. Instead of viewing the income production from equities as an ancillary component of returns, we view the payment and growth of dividend income as a primary component.
• Average holding periods for stocks in the U.S. have drastically shortened over the last several decades. We look to do the opposite, lengthening holding periods well beyond average. This allows us to compound the payment and growth of dividend income as well as exploit volatility by capitalizing on mispricing’s caused by short-term news cycles.
• By eschewing the ever-present story stock of the day, many of which end up producing inferior or negative outcomes, we look to consistently raise the probability we don’t permanently impair investor capital.
• For an investment philosophy to be executed successfully over the long term it needs to be understandable and transparent. All too often, investors are intrigued by opaque or complex strategies, that purport to offer codes for investment success. We take the opposing view, believing strongly that simplicity and transparency are virtues, and are ultimately much more effective in producing long-term investment success.