We are value investors

Our video to the left talks a little more about how we approach investing.

The bottom line is we invest when:

• we have a competitive advantage (or in other words, when the seller does not care about the price);
• when there is a margin of safety (a large difference between where the stock is trading and what we think the company is worth);
• when the balance sheet and competitive position of the company provide staying power; and
• when we feel the Board and Management interests are aligned with ours

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​Margin of Safety



​A Margin of safety is fundamental to what we do.  Just like when you go shopping and look for a bargain, we look for bargains in the stock market. Margin of safety simply means there is a big difference between what a stock is worth and what we are paying for it.

​Why would someone sell something for less than it is worth

Two key reasons:

1. They are scared or bored and just want to get out. For example, we were investing heavily in Japan in 2012 when people thought Japan had no future; or
2. There is some type of impediment to investing. For example, we look for companies where there is dislocation. We recently bought shares of a company which was being spun-out of a larger company.

​​Alignment of interests

The key question is are the Board and senior managers in the same boat as the shareowners?

Tim McElvaine has served on the Board of Directors of 4 publicly traded companies and several compensation committees. This has given us perspective and insight few fund managers have.