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Owning vs. renting
We are long-term oriented, patient investors in great companies not "flippers" of stocks.
We view stocks as ownership interests in the underlying businesses and we want to give
management of those businesses ample time to execute their strategies and build
capital for their owners. You can’t participate in the fruits of owning a truly exceptional
business by timing your jumps into/out of the stock. Capital is built in these businesses
over a long time and we believe the best way to participate in that capital generation is to
be an “owner” of that business not someone who “rents the stock” for a few months.
But this isn't an easy proposition to manage - investment managers face enormous
pressure to deliver strong near-term results. This pressure greatly distracts investors
from a long-term orientation and as a result, it is hard for most to overcome and act in
opposition to their emotions.
It will - at times - take patience and discipline to stay with our philosophy of limited
turnover, concentrated, long-term focus but we believe it is the right way to invest. Ben
Graham advised in 1934 that we should look at the market not as a guide for what to do
but rather as a creator of opportunity. The excessive greed and panic of the crowd
generates opportunities that can be taken advantage of by investors who can stay
grounded. Tolstoy (while not talking about investing) was profound when he said,
"The greatest warriors of all are these - patience and time."
We view stocks as ownership interests in the underlying businesses and we want to give
management of those businesses ample time to execute their strategies and build
capital for their owners. You can’t participate in the fruits of owning a truly exceptional
business by timing your jumps into/out of the stock. Capital is built in these businesses
over a long time and we believe the best way to participate in that capital generation is to
be an “owner” of that business not someone who “rents the stock” for a few months.
But this isn't an easy proposition to manage - investment managers face enormous
pressure to deliver strong near-term results. This pressure greatly distracts investors
from a long-term orientation and as a result, it is hard for most to overcome and act in
opposition to their emotions.
It will - at times - take patience and discipline to stay with our philosophy of limited
turnover, concentrated, long-term focus but we believe it is the right way to invest. Ben
Graham advised in 1934 that we should look at the market not as a guide for what to do
but rather as a creator of opportunity. The excessive greed and panic of the crowd
generates opportunities that can be taken advantage of by investors who can stay
grounded. Tolstoy (while not talking about investing) was profound when he said,
"The greatest warriors of all are these - patience and time."