As many of our readers know, we have always defined our investment style to be “owners of businesses”. It’s a very simple description of our intention to invest in companies that exhibit high-quality characteristics, and to own them for very long periods of time.
The devil, as always, is in the detail. While many companies exhibit quality characteristics in the past, we are really searching for companies that our fundamental research indicates will continue to exhibit high–quality characteristics into the future … say over the next five or even 10 years. Some of the less tangible factors in our research efforts – management expertise and business-model viability – are likely to be important reasons for the persistence of company quality into the future. The by-products of our research are evident in certain statistical measures – concentration, low portfolio turnover, high returns on capital, low downside capture to name a few.