Large Cap

We limit our search for qualifying investments to enduring businesses with identifiable, sustainable competitive advantages which have the ability to consistently produce free cash flow. These types of businesses typically exhibit value stability. We believe there are two components to the concept of margin of safety. The first component is value stability and the second is the discount at which we can purchase the company. We will hold positions in what we consider to be discounted, value stable companies. This approach leads us to owning what we think are some of the best businesses in the world. We strive to capitalize on the enduring nature of our businesses values as they compound over time.

The portfolio represents a subset of our MVP list and typically holds between 20-40 positions in businesses with a market capitalization of approximately $5B or more. The weight of a security in the portfolio is determined by valuation, with more discounted names typically receiving a higher weight and less discounted names receiving a smaller weight. A core position would be 5%. We will exit a holding should the stock price reach our estimate of fair value, if the company’s competitive position erodes, or when we believe its value is no longer stable. As a company approaches our estimate of fair value, we will begin to trim the position, and proceeds will be allocated to more discounted companies. Our goal is to be fully invested at all times.

Learn more about our Investment Philosophy