Our goal is simple: Buy a stock for less than it is worth.

To achieve this goal we look for businesses with good profit margins and returns on capital, sensible managers and a market price that offers a good chance of a better than average return.

We cannot time the market. We will probably never buy at the bottom or sell at the top. Rather than concern ourselves with attempting to buy at the lowest price and sell at the highest price we focus on obtaining the highest quality businesses at reasonable prices.

We will avoid things we do not understand but will always try to expand our knowledge base. It isn't difficult to understand the recent past and know how most businesses currently function. It's much more difficult to know what returns a business will produce a decade from now. Because we consider ourselves owners of a business we will focus on businesses that we think we can forecast with reasonable confidence ten years in the future.

The market system doesn't create success. It weeds out failure. We think this aspect of a free market system is underappreciated, but it's vital to avoiding poor investments. We study failure as much as we study success and seek to identify the root cause of failed businesses and poor investment performance. We attempt to avoid the mistakes illustrated in past failures.

Investing isn't like gymnastics or diving, there are no extra points for difficulty.

Even though we think of stocks as small pieces of a business and we view a business from the point of view of an owner there is one important difference between and actual owner and the owner of a share. We cannot control capital allocation decisions including, special dividends, share repurchase, acquisitions and divestures. For this reason we think it is best to invest with proven management teams that also own a good amount of company stock.