Human behaviour drives markets. People avoid complexity; they seek near-term certainty; they take comfort in crowds. These behavioural biases create mispricing. We built our firm to capture them.
We see opportunity where others see complexity.
Take GE Aerospace. Others saw complexity in the restructuring of General Electric. We saw a defensible franchise with 70% of revenue from aftermarket services contracts lasting the 30-year life of an aircraft engine. A duopoly unchallenged for fifty years, trading at half its value. We bought ahead of the restructuring and made 230%.
Our investments are based on a simple truth: to understand a stock, you have to understand the business — its economics, competitive position, durability. We find businesses with defensible franchises that are temporarily misunderstood or out of favour with investors. Where others see problems and retreat, we dig deep to distinguish temporary noise from permanent impairment and capture value as confusion clears. We remain invested until the stock price reflects the value of the business.
We make significant investments in companies we know intimately rather than spread capital across businesses we know superficially. Deep knowledge reduces risk. We run portfolios of approximately 25 companies typically held for 5 years or longer. By combining focus with patience, we compound returns from our highest-conviction ideas.
