The following principles sets out our investment philosophies; as one might expect, strategies and theses will change over time – these principles will not. We are convinced that if we consistently follow these principles we will be rewarded with outstanding long-term capital appreciation.

We are investors, not speculators. Our objective is to make noncontrolling investments in businesses that have the demonstrated ability to grow intrinsic value at an acceptable rate over time and we look to participate in that appreciation. This requires us to evaluate businesses, not stocks.

We are constant learners and follow the data, not sentiment. We commit to learning as both a discipline and a passion and find that the broader our pool of knowledge, the more opportunities we find inside our circle of competency.

We prefer to look where others aren’t looking. When searching for opportunities, we find that the best ones aren’t usually the ones being talked about, especially in a market awash with algorithmized trading. Looking where others aren’t often lets us see what others don’t. This often leads to taking contrarian positions; we don’t take the opposite side of the crowd by default – taking such an arbitrary approach only guarantees returns that are different than the average, not necessarily better.

We have a deep and abiding appreciation for compounding. There is no surer path to prosperity than putting capital to work in compounding investments and letting time do the heavy lifting for us.

We have a strong preference for businesses that have outstanding unit economics. In finance, as in many other pursuits, much of the excitement happens at the margins. High levels of incremental profit and significant amounts of market share to gain is akin to financial alchemy.

We are students of the pareto principal and understand reversion to the mean. Although we don’t discount the importance of diversification, we also understand the law of large numbers and that the more we dilute the outperformers, the more difficult it will be to outperform the market over longer periods of time. Therefore, we try to swing hard at the fat pitches.

We seek to fully eliminate emotion in making investment decisions. We are of the strong opinion that emotionally-driven decisions rarely turn out well, and when they do, it is due to good fortune masquerading as good ideas.