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.
Our investment decisions are based on bottom-up, on-the-ground research. We travel extensively to observe and interact with a company’s customers, assess its competitors, evaluate its suppliers, meet its managers, visit its facilities, and survey its operations in action.
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,…Read More
The Long-Term Effect of Engagement Algorithms on Earnings
In the last decade, we have watched internet/social media companies iterate and improve user engagement first through a deluge of A/B tests and now through machine learning techniques. Powerful computers are collecting mountains of data about a wide variety of…Read More
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…Read More
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…Read More
Focus On The Customer’s Decision
Earlier this month, Kraft split into a faster-growing international snacks business and a slower-growing domestic foods/grocery business. Despite neither of the companies’ fundamental business prospects changing one iota, the market reacted to the news by trading both of the stocks…Read More