Fundamental research constitutes the foundation of our investment approach. We develop concentrated—yet diversified—portfolios with the intent to hold positions for multi-year time horizons. This technique enables participation in the long-term success of the businesses in which we invest, yet also aims to provide greater tax efficiency (i.e. long-term v. short-term capital gains).
Independent due diligence: We typically research a new investment for several months before making a purchase. We seek to uncover fundamentally sound businesses at attractive valuations through a comprehensive evaluation of each business’ industry growth prospects, competitive position, management experience and incentives, and financial standing. Only those companies meeting our designated criteria pass to the next level of our process.
Thorough financial and valuation analysis: Synthesizing the qualitative and quantitative factors from our research into standard formats allows us to objectively measure a company’s fundamentals. From there, we employ proprietary techniques to determine what we believe is a security’s fair value. Finally, we engage Fairview’s collective intellectual capital to assess the vigor of the investment thesis.
Seek to Buy low: In line with our long-term investment strategy to deliver superior risk-adjusted returns, we exercise strict discipline when deploying capital to initiate positions. After an investment clears the research and analysis hurdles, we aim to turn the pervasive short-term views in the market to our advantage by finding compelling entry points. This often requires patience, which in the context of a multi-year time horizon—such as ours—proves rewarding.
Seek to Sell high: Once a position fully enters the portfolio, we actively track the progress toward our expected outcome. As disruptions periodically occur, our regimented process lends us confidence when weighing potential actions. Ultimately, we replace positions if our objective has been met, the investment thesis no longer applies, or a more compelling opportunity materializes.