Investment Philosophy


Investment Approach

A Long-Term Focus

Unlike traditional Wall Street Research, we do not focus on the short-term results of a particular company. Instead we take long-term approach to stock market investing and try to determine what a given company's results will look like over a long-term time horizon.

A Methodology That Has Withstood the Test of Time

We have systematized our methodology and use a number of unique approaches to help uncover intrinsically undervalued situations such as: the hidden asset method, the business value method, the franchise approach, fallen angels as well as look at both spinouts and companies emerging from bankruptcy. For each company we profile, we analyze it in the same manner as a private equity buyer would to ascertain its intrinsic or private market value.

Not Being Afraid of Having Non-Consensus Opinions

We do not shy away from making provocative calls. During 2007 we had a strong conviction that a bubble was brewing in the housing industry. Not only were housing prices excessive, but the vast majority of homes were also unaffordable. That year we wrote an in-depth report advocating shorting the merchant builders.

While we recognized that not all of our clients had the ability to short stocks, by illustrating our thesis on why homebuilders were overvalued, we believe long-only managers still benefited from this controversial call by hopefully avoiding the sector. You may recall that a number of industry specific analysts were not only positive on the group but were also calling for a multiple expansion.

In 2011, we authored a 93 page report detailing why it was an opportune time to consider investing in U.S. housing related stocks when the overwhelming consensus on Wall Street was that a housing recovery was many years away.

To download our 2007 report, please click here.

To download our 2011 report, please click here.