Organic Research. The word lapides is the plural form of the Latin word
for "stone", and our philosophy is just that: to leave no stone
unturned in our quest for attractive investments. Intensive, organic
research lies at the very heart of what we do.
However, research has no
meaning without conviction and context. To have conviction, we believe there
must be focus, originality in thought, and a willingness to take an unpopular
Concentration. Our research focuses on industries we know, where our
cumulative experience can have a meaningful impact on our clients' portfolios.
Further, our portfolios consist of a limited number of holdings with
significant positions so when our research pays off, the impact on the
portfolio is substantial.
Thinking. Three decades of researching companies around
the globe gives us the advantage of first-hand knowledge of a broad range of
industries. Our unique perspective is both a philosophy (something we believe
we must have to be successful) and a product of our hands-on research. This is
where our extensive knowledge as generalists helps us build the mosaic for each
of our investments that we believe gives us a competitive advantage.
Being contrarian means being willing to take the unpopular stand and embrace a
view others do not share. Our proprietary research allows us to have sufficient
conviction in our thesis to buy our shares when others are giving up. Simply
put, if we know a company thoroughly, we can take advantage of any temporary
dislocations if it disappoints, becomes ignored or is misunderstood.
Our intensive research, perspective and our focused, contrarian
thinking are important elements in achieving superior returns. Before we can
compound capital, we must first be conscious of preserving it. To do this, we
have a philosophy of buying evolving situations where the value is
under-appreciated or misunderstood. Dispassionate objectivity means letting the
facts and independent, critical thinking be our guides.
Preservation. The best way to achieve superior results is to minimize losses
in the first place. We believe in buying when expectations are low so that the
risks of further declines in stock prices are diminished.
Value, Sell As Growth. It is always best when buying something
of value to purchase it when it is on sale. Our philosophy is to seize
opportunities by paying significantly less than the underlying business is
ultimately worth. Our intent is to sell our investment to less price-sensitive
investors as our original thesis plays out with rising earnings momentum,
justifying valuation multiple expansion.
Value. Evolving value is meaningful change - the transformation of a
company into something materially better than it was. We find the best returns
come from companies that can succeed in this transformation. Our experience
enables us to discover outstanding candidates and, hopefully, profit from our
Dispassionate Objectivity. We are objective -
nothing clouds our long-term perspective. Our approach allows us to make
calculated assessments based solely on the facts, our existing knowledge and
our extensive research.