- Our capital represents the savings and lifetime work of our shareholders. We believe that capital is scarce. Accumulating it requires time, effort and sacrifice. Keeping it is quite difficult. We have the utmost respect for its irreplaceability.
- Our objective demands that we operate with complete disregard for what others in the financial industry do, what they expect, and what they consider valuable. We do not operate with a strict set of rules regarding asset allocation, position sizes, the mechanical pursuit of diversification or the mimicking of any index.
- We are profoundly concerned with the kinds of risks that tend to lead to a permanent loss of capital. We believe that hubris, unaccountability, financialization and monetary debasement are every bit as threatening to our savings as are the factors concerning a company’s financial statements, competitive standing and industry trends.
- We value responsibility and accountability in corporate governance as well as the avoidance of conflicts of interest consistent with the duty of loyalty and the duty of care.
- We do nothing complicated or formulaic. We invest in businesses and people we understand and avoid those we do not, no matter how compelling they may appear to be. Our emphasis on the qualitative may not be fashionable but we believe it to be correct.
- We are owners rather than investors. We deploy our capital alongside other owners, with skin-in-the-game, whose life’s work is committed to the long-term survival of their company.
- We like natural monopolies and economic niches having scale, barriers to entry and pricing power, but also owned and managed by similarly minded and motivated persons.
- We believe our work will speak for itself. We will, however, be faithful in communicating to our shareholders in full what we do and why.
- We operate in the financial industry but we are not of it. We reject its principles, its practices and its methods. Scarcity, permanence and independence—these are the attributes we prize most. When we do come across them together, we’re not looking to sell.
- Our quest for permanence means we prefer what is firm, durable, earned, and designed for continuity, rather than what is fragile, fleeting, and unsure. Permanence is the result of focusing on the customer, rather than on any financial rewards that might ensue from this focus.
- We strive to keep our costs low, but will not sacrifice our intellectual or operational freedom for the sake of lower costs.
- We believe that wealth creation comes in spurts and not in the tidy logic of financial models. Great opportunities come only once in a while.
- We do not engage in practices that can result in sudden demands for large sums, either from debt maturities or derivative contracts.
- We have no predetermined investment horizon or exit strategies and are eager to participate long-term in the compounding of earnings.
- We are neither bearish nor bullish but rather keen to distinguish what is real and true from what is not.
- We seek to hold a diverse collection of assets, but do not rely on diversification to compensate for risks we don’t understand.
- Although very sceptical of the financial world, we trust individuals who act honourably and have demonstrated responsibility and accountability.
- We avoid all finance-related endeavours, the idea of growth for its own sake, short-term thinking, financial engineering, and endeavours we don’t understand.