As Bill Gerdts likes to say, “What we do is simple, but it's not easy.” We believe that having a disciplined process to assessing and building a portfolio of individual equities is the best risk-adjusted investment strategy to potentially grow and sustain wealth. We endeavor to accumulate above average quality companies, at discounted prices, to get above average returns over time. Unlike many Financial Advisors, we do not try to time the market or speculate on short-term movements, we are not interested in the new hot stock or trend and we do not use leverage strategies to inflate returns. We use a conservative, simple, and transparent strategy that Bill has developed over his 45 years of experience in private wealth management to create a diverse, custom portfolio of high-quality investments; one stock at a time. We utilize fundamental analysis to look at each company from a quantitative and qualitative perspective to understand: who is running the company, what is their competitive advantage, and what is the intrinsic value of the company. We spend weeks researching each company and may wait months or years for the right moment and price to invest. We are personally invested in many of the companies we recommend to clients. As Warren Buffett says, “Price is what you pay, value is what you get. Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down."
We seek to manage risk by carefully considering the quality of the companies we own and the price at which we seek to buy them. Even a great company can be a poor investment if you pay too high a price. We pursue a certain margin of safety based on the purchase price, our intrinsic value calculation, and the conditions of the market. Many investments will have an attractive potential but there is too much risk in either the price or fundamentals. This approach eliminates many potential investments, but staying disciplined in our process to find companies that meet these criteria will, in our opinion, reduce the risk of loss of principal. We look for the companies that have a strong balance sheet, effective management and a non-replicable competitive advantage, whose share prices have temporarily fallen, representing a discount to historical valuations. We cannot avoid short-term market volatility. Market volatility is the cost of owning equities, but those moments are temporary and create opportunities to buy at a discount. Historically the value of a high-quality company is rewarded over time. As Buffett says, “Time is the friend of the wonderful company and the enemy of the mediocre.”
Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.
