Our Investment Philosophy
We believe that professional money management is a specialized blend of science and art – practiced most effectively by seasoned professionals that have firm philosophical convictions, discipline and a long-term focus. Our philosophy can be summarized by the investing formula:
Discipline + Patience = Success
By tuning out the short-term market noise and focusing on individual company fundamentals, we are able to remain patient and keep our eyes on the big picture. Warren Buffett once said “Someone is sitting in the shade today because someone planted a tree a long time ago.” We wholeheartedly agree!
The Pie vs The Nine Boxes vs The Oracle
Common Strategies We Avoid
We believe there is such a thing as over-diversification. A ‘pie’ investment strategy can dilute your returns in the long run.
The trend toward passive index strategies is too simplistic and unnecessarily exposes investors to value traps and/or speculative investments.
A pie investment strategy can be costly because clients pay two layers of fees: one layer of fees for the investment adviser doing the allocating and another layer of fees for the mutual funds in which the assets are invested.
Many advisors are professional asset-gatherers investing not-to-lose rather than professionally managing your money.
The Nine Boxes
We believe that ‘nine-box-investing’ results in an uncoordinated, piecemeal investment strategy lacking a strategic long-term vision.
It can create overlapping ownership of the same stocks which may subject an investor to unintended risks.
The ownership of thousands of securities in an investment portfolio will most likely lead to average, market-like returns.
Professional money managers should have the flexibility to invest where opportunities lie and should not be constrained to a particular style box or market capitalization.
We believe Warren Buffett, the Oracle of Omaha, has it right. Investing in a portfolio of approximately 30 companies provides for adequate diversification and meaningful position sizes that can move-the-needle.
LaFleur & Godfrey’s investment philosophy is similar to Buffett’s in that it is based on a focused, best-ideas approach to investing that favors the ownership of individual companies over costly investment products / strategies.
The core of a growth portfolio should emphasize fast-growing sectors & companies that benefit from favorable population demographic trends. We call this Mega-Trend Investing!
Registered Investment Advisors (RIAs)* like LaFleur & Godfrey are subject to a fiduciary standard. This standard establishes an obligation to act in the best interest of our clients at all times.
*Registration does not imply government approval or that the registered advisor has attained a level of skill or training.
Advice from Investing Legends
“If you want to have better performance than the crowd, you must do things differently from the crowd.”
– Sir John Templeton
“Wide diversification is only required when investors do not understand what they are doing.”
– Warren Buffett
“Know what you own, and why you own it.”
– Peter Lynch
Custom Equity Portfolios
How We Do It
Active Investing > Passive Investing
We actively ‘invest to win’ by selecting leading companies in the fastest growing sectors – in contrast to many of our competitors that ‘invest not to lose’ by overly-diversifying in passive investments like index funds and ETFs.
Company Ownership > Product Ownership
We have long believed that great lessons can be learned from the investing legends of the past. Peter Lynch’s ‘know what you own’ approach is timeless and enables investors to ‘see the forest for the trees’ in times of market uncertainty.
Focused Investing > Over-Diversification
We believe that the Warren Buffett focused approach to investing is the right one. Adequate diversification for many long-term investors can be achieved through the ownership of 20-35 names. Our ‘move-the-needle’ investment approach gives us the best opportunity to outperform the indexes in the long run.
The Tortoise beats the Hare
Many investors overlook the behavioral aspects of investing. A common trait of the most successful investors of our generation is patience. We keep portfolio turnover low to let our winners experience compounded growth over time as well as minimize our trading costs and capital gains.
*The information presented here is for informational purposes only and should not be construed as a recommendation to buy or sell a specific security or investment. All investments carry the risk of loss – including the risk of loss of principal invested.
We specialize in making smart, focused investments that anticipate the growing needs of the future.