Human behaviour drives markets. It never changes. People avoid complexity. They seek near term certainty. They take comfort in crowds. These biases create mispricing. Persistently. We built our firm to capture it.
We find companies whose earnings power is obscured by temporary noise, too ugly for an algorithm to buy, but perfect for an actual investor.
We buy defensible franchises whose value is obscured, at half the business value, or less.
We do intensive and independent analysis to distinguish temporary noise from permanent impairment, emphasizing competitive position, staying power, and ability to generate cash.
Take GE Aerospace. The market saw a messy conglomerate. We saw a business with 70% of revenue from aftermarket service contracts that last the 30-year life of an aircraft engine. A duopoly unchallenged in fifty years, trading at half its value. We bought ahead of the restructuring. We're up 230%.
Or GFL Environmental. The market saw a company overburdened by long-term debt. We saw North America's third-largest waste management company. A business with 100% recurring revenue, rising profit margins and a long runway for acquisitions to fuel growth. Up 120% in two years with considerable opportunity remaining.
Both companies fit another pattern we favour: businesses run by their owners. Do you take better care of a home you own or a home you rent?
The facts will change. Our view evolves with them. We sell when the investment thesis proves out, or proves wrong.
Intimate knowledge reduces risk. We make significant investments in companies we know intimately rather than spreading capital across businesses we know superficially. Our portfolios hold approximately 25 companies, typically for five years or longer, because some franchises keep creating value.
The modern market is dominated by index funds that ignore fundamentals and algorithms that optimize for the next 90 days at most. This creates a structural opportunity for us.
Our portfolios don't look like an index, by design. Our approach is not replicable by indices or models. It demands independent research, deep conviction, and the willingness to stand apart.
