Investment Approach

We employ a global, multi-cap, bottom-up core approach to selecting investments within client equity portfolios.  In everyday English, we seek to invest in first rate companies  wherever we can find them and hold onto them as long as they operate their business enterprise for the long term benefit of shareholders.  Over the past ten years, portfolio turnover has averaged less than 20% per year.

We construct portfolios of individual securities for clients rather than create and manage a Fund into which we make client investments.  This allows much greater control over the timing of capital gains realization for clients, and is one way we customize portfolios to help reduce prospective tax liabilities.

We believe in diversification.  In practice, we tend to equal weight investments in similar sized companies, and our typical portfolio has 30-40 equity investments.  While many investment professionals do not believe the overall risk inherent in a stock portfolio can be adequately covered with so few investments, we believe it can.  Our experience and our track record indicate that our portfolio is comparable to the overall market in terms of assumed risk, while returns have been consistently higher.

For trust portfolios and individual trustees, we have a particular sensitivity to the issues they confront, and we can provide ongoing assistance in addressing these issues (see Expert Witness qualifications) and in managing portfolios in accordance with Prudent Investor.

Within the fixed income arena, we emphasize high quality and intermediate maturities. Here again, we favor individual securities, particularly in what appears to be a rising interest rate environment.  A short to intermediate bond (our current recommendation) has limited exposure to rising rates while bond mutual funds have no maturity and cannot protect principal nearly as well when interest rates rise. 

In IRA’s and Roth IRA’s, as well as eleemosynary portfolios, we are proponents of using Treasury Inflation Protected Securities (TIPS) as a means of protecting against inflation coming in at higher than expected levels in the future.

We prefer companies with conservative balance sheets.  We also prefer companies with clearly stated dividend policies and less emphasis on stock buyback programs in excess of what is needed to neutralize stock option awards granted to management.

We do not utilize quantitative screening techniques to produce investment ideas.  We generate all our own ideas based on extensive reading and listening to those investment and economic practitioners who we have learned to trust.