Real Work, Real Results

Our organization does real work, by which we mean the judgments we reach are supported by a thorough analysis of the available facts. While not prisoner to it, we believe in empirical evidence. We seek to combine the macro and micro and the short- and long-run evidence into a coherent viewpoint. By design, the approach is data-intensive, relying on inclusive, proprietary databases and sophisticated stock selection models. First and foremost, these models are based on judgments about human nature. An ongoing research effort tries to determine how best to translate those judgments into useful decision-making rules.

We recognize that sometimes precedents are irrelevant, or worse, misleading. Creativity and courage, the determinants of long-term investing success, are required. Countervailing forces are almost always obscure at the beginning, and intuition and instinct are the partners of facts, figures and models. The difficulty in building stock selection models has increased as globalization has changed how the pieces of the puzzle fit together and as traders have come to outnumber investors. The power and direction of some trends have exceeded those that have come before, and systematic under-reaction to current information, long an investable anomaly, has largely disappeared. Models must be more dynamic and adaptive than before, and their primary value lies in the sophisticated melding of disparate signals. As the number of practitioners has multiplied, the need for continuing research and informed judgments has gone up. We don’t expect to find an inclusive, unified theory of investing, but rather, we believe that it’s the integrity and intensity of the research process that leads to success.

To sum up, effort = outcome.