Economics works. Thoroughly understanding the economics of companies is fundamental to predicting their long term performance. Among the issues that we analyze are market supply and demand, competitive advantages, management quality and incentives, growth potential and financial position.
Valuations are key. Having a clear understanding of share price relative to share value is essential to investing successfully over the long term. We assess the value of companies based on their intrinsic worth as well as on various multiples relative to similar companies.
Interviews and due diligence are essential. Skillful interviewing of key personnel and performing due diligence on companies can reveal a wealth of information, positive as well as negative, about a company. We have performed due diligence on and interviewed managers from dozens of companies.
Analysis is based on models. An important aspect of our research is building detailed financial models on each of the companies that we analyze.
We are essentially fundamental, bottom up, value investors. Our research and investments are based on a few basic principles: