Our Philosophy

We believe that security prices are relatively efficient in the long-run, rationally reflecting the market’s perception of a company’s future earnings and cash flows. We believe that in the short-run, however, an individual stock’s price can fall out of line with its intrinsic value.

Specifically, we believe that:

• solid fundamental research performed by experienced, hard working investment professionals can be used to identify attractive investment opportunities
  
• while markets will generally move higher over time, opportunistic changes in exposure can reduce volatility
  
• modest short exposure in a portfolio can provide significant volatility reduction
  
• in the right environments, short strategies can also be additive to overall performance.

Further, we believe that a portfolio can be constructed from attractive investment opportunities in a manner which will produce a low volatility return stream in excess of the U.S. equity markets. This portfolio would be characterized by diversification, and would be constructed by patient and disciplined investors.

A portfolio constructed in this manner would reduce the risk from any one security, sector or strategy. It would generally have less turnover and would maximize after-tax return.

These observations form the foundation upon which many of our strategies have been built.