Risk Management

Value Investing
We believe that securities purchased at a discount to their intrinsic values are more resistant to capital loss, providing a margin of safety for our portfolios. Clearly, a security which is already at a low valuation has less risk of downside. We purchase securities of strong companies meeting our fundamental criteria and avoid those that our research indicates are overpriced.

Diversification
Our portfolios are typically invested in 20-30 securities across various sectors and regions in order to insulate the portfolio against specific security risks and market sector downturns, though we often concentrate in certain securities and sectors that are the most attractive as we tend to overweight our best opportunities.

Asset Allocation and Short Selling Strategies
We can rebalance our portfolios and/or increase cash positions where our research and analysis indicates a potential market correction. For Long/Short accounts, when our outlook is negative, we can adjust the portfolios by increasing our short positions. Short selling potentially enables us to realize a return as well as protect our long positions in down markets.

Understanding what we own
We diligently and rigorously conduct our own research. If a company appears undervalued, we analyze its business model, management, financial position and operating environment. We attempt to fully understand our investments to best ensure our appraisals are accurate.

SVA™ Methodology
Our licensed SVA™ methodology can minimize losses by indicating stop loss signals on deteriorating positions which fall through valuation zone floors. It also helps identify where to book profits as securities hit ceilings.

Risk Monitoring
We continuously monitor our portfolio holdings in order to identify and react to changes in business prospects or risks.