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Our Philosophy
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Concentration in sectors and concentration in individual companies will be a key determinant of long-term out-performance.
"I don’t want a lot of good investments; I want a few outstanding ones." — Philip A. Fisher
- Modern Portfolio Theory has worked long and well for many portfolios, but it has its limitations — a core and explore construction offers our clients a way to indulge in some investments producing market out-performance (Alpha), while controlling risk and maintaining volatility in relation to the broader market (Beta).
- Some limited diversification is good, but over-diversification is a handicap.
- The diligent use of stop loss rules in individual positions to prevent allowing mistakes
to get even bigger.
"The whole secret to winning and losing in the stock market is to lose the least amount possible when you’re not right." — William O’Neil
- The diligent use of rebalancing to keep portfolios in check, not allowing one position, one sector or one manager to overtake the portfolio.
- A longer-term "range bound" market is still our expectation so active management will outperform buy and hold approaches.
- The use of "hedging principles" and not necessarily hedge funds will be paramount to
create gains.
- Until a bubble bursts, you are in a boom – participate to some degree.
"When bubble talk begins to lather up around a particular asset market, it usually means a few things. First, that particular asset class is up a lot. Next, the folks who are quickest to apply the bubble label haven’t owned any, or enough, of it." — Michael Santoli
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Our Philosophy