Concentrated Investors in High-Quality Companies at Attractive Prices

We define high-quality companies as those with a discernible competitive advantage that are led by capable and aligned management teams who think and act like owners. When leaders have meaningful ownership and a long-term outlook, they are motivated to prioritize value creation through disciplined capital allocation, reinvestment, innovation, and high-performing team cultures.

Benefits of Concentration

Portfolio diversification is essential to reducing risk, but only to a point. As the chart below illustrates, portfolio volatility is significantly reduced when holding a concentrated portfolio of approximately 20 stocks diversified across multiple industries. We believe adding substantially more companies can increase risk while diminishing performance, as it dilutes our collective knowledge and reduces the impact of our best and most reasoned ideas.


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Adapted from James Montier, Value Investing: Tools and Techniques for Intelligent Investment (London: Wiley Press, 2009), 42