1.

We seek to maximize the long-run compounded returns of our funds through the ownership of a concentrated portfolio of well-managed companies with sustainable competitive advantages that promise to generate superior returns on capital over time. 

2.

We are fundamental, company specific investors with a quality bias. We do not invest in companies to gain country exposure, and we avoid investment in countries that pose an unacceptable political or macroeconomic risk.

3.

We will only buy companies which we believe are trading at substantial discounts to their intrinsic value, selling as they approach intrinsic value or significantly superior opportunities arise. 

4.

We will only sell short securities when we believe they offer an exceptionally attractive risk/reward. Risk control is the key to successful short selling.

5.

Volatility is not a good proxy for the riskiness of the securities we own. Analysis, prudence and valuation are our principal tools for controlling the risk of our long positions.

6.

We take our rights and obligations as part-owners of the businesses in which invest seriously and believe that the proper owner mentality is only possible with a low-turnover, concentrated portfolio.

7.

We will restrict the partnership’s assets under management, returning capital when necessary, in order to achieve superior returns.

8.

We will disclose our top five holdings on an annual basis. 

9.

We may use modest amounts of leverage to amplify our long-run returns.

10.

Regardless of the likely returns, we will not invest in businesses that we find ethically objectionable.