Pieces of businesses, not pieces of paper.

Investing is about more than simply buying shares on the stock market. It demands an entrepreneurial mindset, an understanding that stocks are not just pieces of paper, but pieces of businesses, businesses in which a partnership is formed.

No such partnership can be formed without an in-depth analysis of three broad criteria: the business, the people and the price. A good partnership also requires investing in economically sound businesses with sustainable competitive advantages that fall within our circle of competence.

Most importantly, the business must generate more cash than it needs for its operations and have a management team that shares our long-term focus.

Understanding a company’s management is one of the most challenging yet important tasks in our evaluation process. The people and management culture of an organization are vital. Their actions in large part determine the future value of our investment.

Much like a consumer in search of a bargain, investing wisely involves buying shares in great businesses when they are underpriced by the market, selling at a discount compared with their potential worth.

History shows that over the long term, the stock market yields far greater returns than any other investment class. At Duncan Ross, investment success does not come from convoluted economic forecasts or intricate market timing techniques. It comes from having the patience and vision to ignore short-term market meanderings combined with the discipline and confidence to invest aggressively when opportunities arise.

Over the years, through the thick and thin of economic cycles, we have remained true to our investment approach. It has stood the test of time, and has allowed Duncan Ross to outperform its benchmark over the long term.