Our Philosophy

For corporate and individual investors, the financial markets have changed in significant structural ways over the past two decades. Fundamental to these changes are four factors:

• An institutionalization of large pools of assets.
• Instantaneous global dissemination of news and information through satellite television and the Internet.
• Rapid worldwide movement of large sums of capital.
• The creation of tens of thousands of different investment vehicles worldwide.

These factors, result in volatile financial markets characterized by the global movement of money from one asset class and country to another in search of the highest near-term appreciation. Often these transactions occur without regard for the long-term financial implications for the client, as the great majority of money managers are rewarded for their short-term performance. All in all these events can create an intimidating investment backdrop.

In addition to the aforementioned, investors are plagued with many problems. The following are examples of the difficulties we experience as investors:

Emotion-Based Decision Making: Have you have ever sold a stock because it had gone up and you didn’t want to “lose your profit”—only to watch it double or triple in price in the years after you sold? Perhaps you sold a stock because it had gone down—only to watch it rebound in the following months or years. If so, you are probably a victim of emotional-based decision making

Lack of Time: Many people, in spite of their best intentions, find that they don’t have time to adequately research their investment decisions. They intend to read the various publications they buy to help them make those decisions, but never quite get around to doing it. I’ve spoken to more than a few people who had saved recommendations from a magazine or newsletter on the corner of their desk, only to find out that by the time they acted they had missed out on a good deal of profit.

Analysis Paralysis: Other people have time to research their investments, but feel so overloaded with facts that they never act. If you’ve ever kicked yourself for not buying XYZ Corp. three years ago when you knew it was a good buy, you probably suffer from analysis paralysis.

Bad Advice: Have you have ever taken advice from a broker or agent who profited from a transaction that lost money for you? If so, you’ve been party to arrangements that were structured to be win/lose, not win/win.

Lack of discipline: A lack of disciple with regards to when and how much to buy and sell can lead to bad investment decisions. A portfolio constructed without guidelines creates a need for continual re-evaluation of the buy, sell or hold question for each position. The more each decision is reviewed the greater the chances for error.

The combinations of these structural, practical and emotional factors make successful investing difficult for today’s investor. While the hoards of fund managers and investors struggle to keep up with the whirlwind of a global marketplace, there is a select group of investors who are acting with a focused, long-term focus. These people are the directors and management of the individual corporations whose securities are publicly traded every day. These people know when their company’s stock is undervalued or overvalued. There exists a select group of companies who respond to the under-pricing of their own stock in the marketplace by repurchasing shares and utilizing stock buybacks. Studies have shown that portfolios made up of buyback stocks can out-perform portfolios of companies that do not repurchase shares by up to 388% over a ten-year period!*  Following a disciplined strategy of staying consistently invested in a portfolio of companies that repurchase shares can help the individual investor avoid making investment errors and deliver superior long-term results. Some have referred to stock Buybacks as the ultimate in insider buying!