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: Global

Our investment mandate and research footprint are both global in scope. This reach gives us the greatest opportunity to identify businesses that meet our investment criteria. This approach helps ensure we invest only in our best ideas.

Emerging Market Bottlers

Emerging Market Bottlers

One of the key characteristics that we prize with bottlers is the underlying reliability and predictability of their earnings.  In past economic downturns, the performance of these businesses was particularly resilient, as consumer demand for their goods was income inelastic,…

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Cook & Bynum as a “Conglomerate”: Bottlers, Broadband, Brewers, & Berkshire

Cook & Bynum as a “Conglomerate”: Bottlers, Broadband, Brewers, & Berkshire

One way we think about the Cook & Bynum portfolio as a whole is as a conglomerate comprised of nine carefully selected companies that are organized into four principal divisions with significant operations on five continents: (1) a geographically diversified…

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Covid-19’s Economic Impact

Covid-19’s Economic Impact

The global economic impact of COVID-19 has been stunning.  The resulting trillions of dollars of lost wealth will be borne by many, with some of the immediate impacts obvious while the longer-term, second-order effects are less clear.  Just in the…

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No, Not Now, Too Hard, or Never

No, Not Now, Too Hard, or Never

The portfolio update sections of our letters almost invariably share only the buy and sell decisions that we do make, rather than the ones that we do not.  Meanwhile, we spend most of our time evaluating investment opportunities that we…

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Where We Are Looking For Value

Where We Are Looking For Value

Previously, we shared the year-to-date results for several international indices and discussed how short-term volatility creates opportunities that we work to exploit.  Longer-term returns for this group of indices are even more interesting.  This chart shows their performance against the…

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The Mystery of the Missing Goods

The Mystery of the Missing Goods

A Brief Introduction to Price Controls: Consumers see the price of a good as an expense and therefore price increases as a burden. Producers see prices as income and therefore price reductions as a threat. This healthy tension between buyers…

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Recency Bias, Global Interest Rates, and Return Expectations

Recency Bias, Global Interest Rates, and Return Expectations

Evolution has rewarded humans (and animals in general) for recency bias.  For example, if one of our ancestors found food down a certain path one day, that was probably a good place for him to look again the next day. …

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Expanding Our Geographic Circle of Competence

Expanding Our Geographic Circle of Competence

We were able to spend a great deal of quality time with many levels of management in one of our core holdings and to get a much better understanding of what is actually happening on the ground.  This company’s management…

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