- Set Reasonable Expectations
- Financial return assumptions should be conservative
- Identify and invest in opportunities where conservative assumptions have the potential to lead to surprising results
- Change is inevitable
- Concentrate on Our Best Ideas
- Portfolios with fewer names tend to outperform
- Industry exposure has a significant influence on portfolio returns
- Identify companies that possess strong cash flow, high return on equity, and superior growth characteristics
- Listen and Adapt
- Constantly assess the economic outlook, industry and company fundamentals, valuation tools, and the technical picture
- Employ a strong sell discipline, pruning positions that outperform over time, and eliminating positions that fail to meet expectations
- Maintain a fresh, new ideas list of stocks to replace those positions that have been pruned or eliminated
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