Our investment universe is limited to businesses with sustainable competitive advantages, or “economic moats.” We seek to purchase the common stocks of these businesses at prices below intrinsic value, but we are acutely aware that the value of a dollar in a business that can re-invest capital at a high incremental return is substantially higher than the value of the same dollar in an average business. Our valuation discipline focuses on maximizing margin of safety, while at the same time minimizing opportunity cost.
Identifying economic moats and exercising price discipline are the first two elements of our approach. The third is partnering with talented corporate managers who leverage the competitive advantages of their businesses by allocating capital to only the highest-return opportunities.
Our investment universe is limited to businesses with sustainable competitive advantages, or “economic moats.” We seek to purchase the common stocks of these businesses at prices below intrinsic value, but we are acutely aware that the value of a dollar in a business that can re-invest capital at a high incremental return is substantially higher than the value of the same dollar in an average business. Our valuation discipline focuses on maximizing margin of safety, while at the same time minimizing opportunity cost.
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