How We Think

These topics, which are largely excerpted from client letters dating back to our 2001 inception, provide insight into our philosophy and the key tenets that have consistently underpinned our investment approach, which has remained unchanged since our founding. These ideas and concepts are not all-encompassing but do provide a sense of “how we think” and our application of our investing philosophy.

Topic: Discipline

To produce attractive returns on capital over time, we must apply our philosophy and core investment criteria in a consistent, disciplined, and patient manner. We have a high bar for information sufficiency, but we must complement this preparation with an ability to act decisively when opportunities are present. We work hard to marry "extreme patience" with "extreme decisiveness."

“Invert, Always Invert”

“Invert, Always Invert”

The great 19th century mathematician Carl Jacobi was fond of saying that when you encounter a tough problem, “Invert, always invert.”  This principle has applications in many fields, not the least of which is investing.  The purpose of investing is…

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Geometric Means, Kelly Criterion, etc.

Geometric Means, Kelly Criterion, etc.

We continuously have in-depth discussions surrounding the purchase or sale of a given security, but there exists another equally important problem for the investor — how to allocate capital between competing qualifying ideas.  It is not good enough to simply…

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When “Mr. Market” Frets, Opportunity Knocks

When “Mr. Market” Frets, Opportunity Knocks

Diligence when adding new capital is imperative to ensure that existing partners are not diluted out of sizable positions in businesses that we currently own.  We have been quite fortunate to acquire new positions and to add to most of…

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