We are opportunists; we often, though not always, find investments where quality securities have fallen out of favor with the market. A promising investment prospect is submitted to an abbreviated version of our process. Only if the security passes this initial test, will we fully research the company and its environment.

 

When we value a company, we determine its ‘underlying value' by accurately identifying, analyzing and pricing its assets. We also determine whether the asset base is of high caliber. These assessments are done in-house through original research and independent judgment. We will decide to invest in a company only if its assets are currently undervalued and of high-quality.

 

We compare a company's underlying value to its market price. We then identify and value the claims against the company's assets. If its security trades at a discount, we identify the key factors that could serve as a catalyst to eliminate this valuation gap and increase the security's price. We can then evaluate the price required to control a particular instrument—and make either a positive or negative investment decision.

 

We constantly monitor our portfolios to ensure that companies continue to exhibit the traits that originally made them compelling investments. We also constantly monitor the markets so that we can take into account any changes in conditions that might alter the merits of a particular investment.

 

We sell securities when we consider them fairly priced or when new developments lead us to believe that part of our original conclusion to buy them is no longer valid.