My goal is preservation of capital with significant appreciation. I will only purchase stock of companies with a significant perceived discount to intrinsic value. Proper value investing requires discipline, which may result in my holding a relatively large cash position over extended periods. This may cause under-performance during speculative markets. My goal is to outperform the S&P 500 over an entire business cycle, typically eight years.
I look for cheap, ugly, obscure, or just plain boring companies that have a durable competitive advantage and are temporarily suffering from headline risk. When markets are in freefall and all companies are being sold indiscriminately, I aim to buy high quality companies with the largest durable competitive advantages (moats), as long term holdings.
This portfolio does not have a particular capitalization bias or a sector bias.
I screen databases such as Morningstar and Value Line for companies with a dramatic fall in per share price (approximately 20% in a week). If the drop is a result of a fall in short term earnings, temporary market share loss, or if the company is suffering from headline risk, I will perform a more in depth investigation of the company.
I review SEC filings and participate in conference calls and webcasts to determine the shareholder friendliness of management. I will only initiate a purchase if I find that management is sound, the problems temporary and valuation compelling.
This portfolio is not diversified, and will usually only hold a handful of stocks. One stock may constitute the majority of assets (for example, it may allocate up to 50% of the portfolio in a single long term holding). Turnover is extremely low except in times of financial panic, when I may accelerate purchases due to a plethora of attractive opportunities. The typical holding period is 4 to 8 years (or one full economic cycle). During bull markets the portfolio may hold a large portion of its assets in cash due to unattractive valuations.
The portfolio may own ADRs as well as ETFs (both leveraged and inverse).
As a company approaches my calculated intrinsic value, I will begin selling the position. With regard to companies that have wide moats (durable competitive advantages) I plan on holding the stock forever, and am unlikely to sell the position unless the company's competitive advantage is reduced or the market values the security too richly - at several multiples over its intrinsic value.
Although the portfolio uses fundamental analysis to select companies, if my analysis indicates a strong secular macro condition I will use ETFs to profit from the trend.
Past performance is no guarantee of future results.
Performance of the portfolio manager's account is calculated by Covestor on a daily time-weighted basis, including cash, dividends and earnings distributions and broker commissions. Manager returns include trades and positions that fail Covestor's trading rules, as a result, actual client returns will differ. Covestor advisory fees are simulated and applied retro-actively to present the portfolio return "net-of-fees".
Average client returns are calculated by Covestor and are composed of the average, time-weighted returns of all active client investments (some of which may contain investment restrictions) to the underlying portfolio. These daily average returns are then linked together for the timeframe presented. These returns include cash, dividends, earnings distributions, brokerage commissions and Covestor advisory fees.
All graph data is as of the end of day for the referenced period, unless otherwise specified. The investment minimum is the minimum investment required to follow a particular portfolio. The minimum amount is determined by Covestor, based on the characteristics of the underlying portfolio. It should not be considered as specific investment advice for your investment situation.
The performance charts are provided for informational purposes only, and should not be used as the basis for making an investment decision. Variables such as corporate actions or foreign exchange may affect daily performance displays. We rely on mathematical formulas, computer programs, and pricing information from third-party vendors to provide these returns. Neither Covestor nor any of its data or content providers shall be liable for any errors in this information or any actions taken by you in reliance upon this information.
Benchmark returns have been calculated by Covestor using a time-weighted calculation of daily index valuations. Benchmarks presented are total return and therefore inclusive of cash, dividends and earnings distributions but not transaction costs.
Leverage indicates the level of margin utilized and is calculated by dividing gross exposure by portfolio net liquidation value.
All Portfolio Manager information including personal data, profiles, strategies, monthly investment reports, and historical results outside of Covestor has been provided by the Portfolio Manager. Covestor makes no representation or warranty of its accuracy, completeness or relevance and it does not represent the opinions of Covestor. Transaction history is available upon request. Portfolio classifications are provided by Covestor, and are intended to serve as a general guide.
Transactions that are marked as "Replicable" passed Covestor's trading rules and were eligible for replication at the time of execution, subject to individual
client constraints. Eligibility for replication may change over time. Actual client investment trade activity may vary.
Index returns do not reflect any management fees, transaction costs or expenses. Individuals cannot invest directly in an Index.