1. Know thyself
    • Define your core competency and investment discipline.
  2. Understand the debate
    • There are two sides of every trade.  It is imperative to understand the motivations of each to prove or disprove a prevailing thesis.
  3. Sustainability matters
    • Companies that consistently produce positive outcomes for society are often rewarding investment opportunities.
  4. Remain objective
    • No investor is right every time. When the evidence mounts against you, move on; and when the odds increasingly stack in your favor, show conviction.
  5. Define the catalyst
    • Cheap can remain cheap, and expensive can remain expensive – define the catalyst for change.
  6. Follow the second derivative
    • We believe changes in rates of growth and margin trends are powerful leading indicators for changes in stock prices.
  7. Be transparent
    • Cultivate a thesis, make it available, and revisit it often.
  8. Appreciate the accounting
    • Accounting intricacies offer insights into business performance.
  9. Be selective
    • The equity markets offer thousands of investment alternatives. Patient investors with a disciplined investment process can focus on the highest conviction areas of interest.
  10. Continuous learning
    • Expanding our knowledge base and broadening our perspectives as capital markets evolve is critical to successfully investing over the long-term.
  1. Be willing to own the whole company, rather than just a small piece of it.
  2. Know how you would react if a holding misses a quarter and the stock sells off materially. Be prepared to maneuver in any situation.
  3. Follow the financials, first. Management teams tend to be masters of optimism. Their commentary is highly relevant, but only in the context of financial realities.
  1. The qualities that attract long shareholders to particular companies don’t change quickly. Be prepared to prove that those qualities are fleeting.
  2. Risk management is key. You must be flexible enough to understand when your thesis is incorrect, and nimble enough to mitigate loss.
  3. If you can’t be proven wrong, you might never cover. All shorts should have a catalyst with a reasonably defined duration to verify the thesis.

To learn more about our investment philosophy and guidelines, please contact us.