Philosophy

Recognizing the need for a different kind of investment firm

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Our Philosophy

Our philosophy starts with recognizing that successful investing requires insight combined with disciplined application of objectivity to identify favorable risk/reward scenarios.  It ends with recognizing the need for a different kind of investment firm.  The industry has gone astray from its roots.  A reset is needed.

While their are many good individuals with good skills and intentions, the industry is structured and carried out primarily for the benefit of the providers, not the clients.

Our firm's philosophy is to put clients' interests above all else (see Core Values).  We started this business to help individual investors and to bring our founder's skill and experience directly to individuals, because they can't get it from other advisors.  If we simply wanted to make money, we would use the expertise to run a hedge fund, not an advisory firm.

Our investment philosophy centers on core beliefs from years of research, study, and experience.  It is based in economic and market fundamentals combined with investor behavior.  Fundamentals drive markets' large moves.  Valuations are the major determinant of long term returns.  Investor sentiment drives short term moves.  By identifying these factors successfully, risk can be managed to avoid large draw down losses and improve overall returns and the profile of returns.  These beliefs include the following:

 
  • There is no sure thing.  Predictions are not just useless, they are dangerous.  Expected payout, based on return and probability, is all that matters, not being "right".
  • No investment manager has a strong history of being "right"

  • Successful managers limit losses and maximize profits

  • All investing entails a trade-off between risk and reward

    • That does not mean more risk equals more reward

  • True investing is not static or easily "modeled"

  • Assuming asset class returns are a given is dangerous

    • Thought should be involved

  • Each opportunity should be evaluated on its own merit of return and probability

  • Intelligent management can improve performance

    • Manage risk to avoid large losses

    • Invest only when opportune

      • High probability

      • Favorable valuations

    • Exit at high valuations

  • Common sense should apply

    • Buying assets at high valuations is expecting great times forever

    • Buying assets with low yields is loaning money to governments and companies for a few percent and not worth it