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Our Firm is an Investment Adviser registered in the Commonwealth of Massachusetts. We focus on wealth creation and capital preservation for our clients by short-term investing in stocks and exchange-traded funds. Your account can be a business account, a regular brokerage account or a retirement account.
Our investment philosophy: We believe that equity markets are inefficient in the short term and many stocks may become out of favor and mispriced.
Overtime, stocks will more accurately reflect their fair values and many will appreciate in price. One of the main reasons for this mispricing lies in human psychology. Most investors cannot control emotions of fear and greed. They tend to be impatient and short-sighted. As a result, investors often overreact to news and do not make wise investments.
Stock markets are cyclical and all stocks can go through the period of weakness and depressed prices. However, we believe that (with rare exceptions) quality stocks always recover when market conditions improve whereas more speculative stocks come back sometimes. By quality we mean solid, well-known and established companies that are the leaders in their field with sound prospects for further growth. Investing in quality stocks when they are out of favor is difficult and requires patience as well as courage of convictions. However, the times of widespread investor pessimism, apathy or even panic are often the times of good investment opportunities to buy these quality stocks at discounted prices.
Our investment goal for you: We are looking for investment opportunities for your account through rigorous research and long-term structural and business needs.
Specifically, we are looking for solid blue-chip quality stocks whose sector may be out of favor and whose stock is, in our opinion, temporarily undervalued (relative to the market or the corresponding sector). The stock of such a company may trade at a significant discount to its true value for a few weeks or months. By investing in these “undervalued” companies for your account, we create the corresponding concentrated stock portfolios of solid operating companies that temporarily trade at “discount” prices. We would sell a company once its stock price appreciates to better reflect its true value.
By such short-term investing, we strive to generate the return (“alpha”) for your account that is significantly higher than the return generated by movements of the broad market. Our emphasis is primarily on quality “value” stocks in the S&P 500 rather than on “growth” or speculative stocks. Short-term investing in such stocks gives the investor a better risk/reward performance.
An example of our approach: In the spring of 2003 we invested in the two largest tobacco companies: R.J. Reynolds and Altria (formerly, Phillip Morris Companies).
R.J. Reynolds was a pure tobacco company with Camel as its major cigarette brand. Altria was a conglomerate consisting of tobacco (Marlboro) with major stakes in food (Kraft) and beverages (Miller beer).