Our sell discipline complements our purchase process by compensating for the variance in risk/reward dynamics
that exists between Consistent Producers, Accelerated Growth Stocks, and Emerging Franchises. Our
objective is to maintain balance between risk tolerance and return objective for each of these distinct investment
categories.
We put "teeth" into our sell discipline by immediately removing stocks from our buy list whenever a price
review is triggered. This discipline forces prompt analysis from the investment committee. The ultimate
outcome of a downside or upside price review is driven by:
- Diversification Effects – Target weightings may be reduced or eliminated to make room for a
better opportunity.
- Valuation Effects – Stocks are sold when the upside potential to our target price fails to justify
perceived downside risk.
- Fundamental Effects – Every effort is made to eliminate positions in the earliest stages of any
permanent deterioration in fundamental value.
EQUITY PHILOSOPHY AND PROCESS
BUY DISCIPLINE
GROWTH STOCK SEGMENTATION
