Our Philosophy

While many of our subscribers have been with us for more than two decades, no investment strategy is for everyone – including ours. There are dozens of ways to succeed (and fail) in capital markets and half the battle is matching your strategy and philosophy with your temperament and skill set. To that end, here is our investment philosophy:

Security Section

Concentrate on turnarounds and unloved stocks with good odds of recovery as standalone entities or takeover targets.

Focus on undervalued securities that are able to generate better than 50% returns via capital gains, dividends, spin-offs, etc.

Analyze financials with an emphasis on sales, cash flows, working capital, debt and dilution.

Assess insiders’ alignment with owners and management’s ability to reach stated goals.

Avoid securities listed for less than five years.

Portfolio Management

Trade sparingly and never be a forced seller.

Practise patience, ignore the market’s pulse and embrace uncertainty.

Balance diversification against diworsification by holding 20 to 30 names.

Sell at least half of a holding when it hits its sell range.

Manage the portfolio’s cash balance through market cycles.

Contra Principles

Own what we write about.

Maintain most of our financial assets in our contrarian stocks.

Remain independent of any broker, corporation or financial institution.