Warren Buffett says investing with a margin of safety is the primary concept that has made him billions. He learned this idea from his teacher Benjamin Graham at Columbia as a young student.
We are interested when we find a great company that is worth say $100 a share but selling for $50 or less. The markets are often manic depressive. Many times good companies go on sale for temporary reasons. We have found this bargain approach to be low risk, often highly profitable and more consistent than other methods.
At PCM we follow this common sense, value approach. It is designed for conservative and retired people who do not want to worry about their money. Buffett says this idea is like buying dollars for fifty cents.
The greatest investors in the world share a common theme: they are bargain hunters. They don’t invest in the “stock market.” Instead, they own parts of selective, great businesses when they are on sale. They are business analysts. They research the value of a company before buying any shares.
Now, after over 30 years of research, I am convinced that buying shares at a discount to fair value is the best overall strategy bar none. We are committed to on-going, thorough research to find opportunities for our clients with a margin of safety.
We search for companies with durable competitive advantages or “moats.” Think of the moat around a castle that protects it from enemies. These quality firms have high rates of return on invested capital. They also enjoy high growth rates of sales, earnings , book values and cash flow. They often have little or no debt.
Companies that have have durable competitive advantages or wide moats often have strong brand names which leads to more consistent earnings. For example, think of how powerful the brand name is for Coca-Cola. If you had a billion dollars to invest, you could not compete against Coke.
Companies with durable competitive advantages may be the lowest cost producer. Some have patents or copyrights that set them apart. Some will have a network effect, a consumer monopoly or have high costs for customers to switch, etc.
We are on the job every day studying value, prices, dividends and moats of high quality companies. We manage your funds through a completely secure and private account with TD Ameritrade Institutional.
PCM clients can withdraw funds at anytime with no restrictions. You will receive a monthly statement, a quarterly progress report, and frequent market updates. You can have 24 hour, online access to watch your accounts. You will benefit from our experience, research and analysis.
We review all assets in your portfolios on a daily basis. You benefit from our experience, our value expertise, our understanding of price, value and moats, our constant review of market conditions, and our commitment to service.
We look forward to answering your questions. Our minimum account is $75,000.
To learn more, call today: (208) 378-1304.