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Given our emphasis on finding companies with the above characteristics,
a number of industry sectors generally do not appeal to us, such as automotive
OEMs, airlines, energy, utilities, or minerals and mining, as these businesses
are characterized by asset-intensiveness, moderate growth, cyclicality,
and/or regulation. In addition, we tend to have limited exposure to industries
like technology, apparel, and toys, where barriers to competition are
limited and product life cycles are short. Instead, we favor growing companies
that provide relatively essential products and services with a clear value-add
such that demand is fairly consistent and price is rarely what drives
customer decision-making.
When we have identified and fully researched a company that meets our
criteria, we wait for a chance to buy it at an attractive price.
We tend to prefer concentrated investment portfolios, which allow us to
leverage the quality of our insights. We also tend to be longer-term investors,
holding core positions for years while shifting weightings to reflect
changes in risk/reward profiles. |
