Active Management Can Help Monetize Growth

We take a long-term approach to evaluating companies, understanding their business lifecycles, determining where they are in the cycle, and deciding whether to invest.

The companies we seek are growth businesses undergoing expansion, perhaps as part of an entrepreneurial phase they’re going through or due to a developmental area they have tapped. Growth is typically a temporary phenomenon: It requires seizing a window of opportunity that can be monetized to benefit investors and won’t be open forever.

We believe growth strategies are well served through active management—the capacity to take initiative and seek out businesses that one expects to be worth substantially more in the future. In our view, growth opportunities require forward-looking perspectives that cannot be acted upon through passive strategies.

How Active Managers Can Gain an Advantage

To gain an edge as an active manager of growth strategies, we believe one needs to embrace ambiguity and be patient. We invest for the long run upon identifying an opportunity, and resist the temptation to respond to short-term noise or follow the herd. After all, if a certain opportunity looks highly attractive to everyone at the same time, it’s unlikely to be much of a bargain.

Our Approach to Risk Management

Investors often dwell on quantifying risk in terms of stock-price volatility in the short run. Yet we believe there are multiple aspects to risk. We look at a stock’s fundamentals in order to get a deeper sense of our risk exposure. Risk can stem from leverage on a company’s balance sheet, workforce disputes, product obsolescence, or any number of other factors. With this recognition in mind, we take an integrated view of risk management, which helps us see through short-term volatility and focus on the long-term opportunities.

Areas of Opportunity We See

We believe that some of the greatest areas of investment opportunities are in game-changing innovations, groundbreaking solutions and pioneering research in such areas as medicine and technology. If there’s a promising quest for curing a terminal illness such as cancer, or demystifying an aspect of our genetic makeup, or a breakthrough solution for parsing “big data,” I’d like to partake in it as an investor.

Other areas of opportunity that excite us include electric cars, solar power, and advancements in the technology of batteries as the indispensable source of mobile power for consumer devices and motor vehicles.

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