Our Focus + investment philosophy of holding great businesses for the long term is proven and time - tested.
The great wealth in our country, and in most others around the world,
was created by business ownership. A careful look through Forbes magazine's
annual lists of the wealthiest individuals and families in the world,
demonstrates that wealth is created and preserved by business ownership.
There are no stock market timers or industry sector rotators that make
the grade.
This business perspective is critical to successful investing. When we
buy shares in a company we are partnering with the owners of a great business,
not buying a piece of paper that we hope to sell in a short time at a
higher price.
Own Great Businesses
At Goodman Private Wealth Management we work hard to identify businesses
that have sustainable competitive advantages that will
serve to protect them from competitors in the marketplace. Our reasons
for making an investment can be summed up in our belief that if a company
is doing well and is managed by people with integrity, intelligence and
energy, eventually its inherent value will be reflected in its share price.
Build Concentrated Portfolios
We practice suitable diversification in our clients' accounts by assembling
concentrated portfolios of 18 - 25 businesses. Many investors are over - diversified;
they have too much capital tied to poor investments and not enough in
the really good ones.
“Investors have been so oversold on diversification that fear of having too many eggs in one basket has caused them to put far too little into companies that they thoroughly know and far too much in others which they know very little at all” - Phillip Fisher
We prefer to find a few great businesses and make meaningful investments
in each of them.
Ignore the Stock Market
Our investment decisions reflect an opinion about long - term prospects
for specific businesses - not short short - term prospects for the stock
market. The stock market is a friend that can be used to our advantage,
but it is not the arbiter of our clients' well being.
“The Stock Market is a short-term, enabled votign machine that instantly reacts to the psychology, fashion and news of the moment” - Ned Goodman
Like the pendulum on a grandfather clock, the stock market
- and the prices of individual securities - swings from periods of over
- valuation to under - valuation and back again. The key to successful
investing is the purchase of shares in good businesses when market prices
are at a large discount from underlying business values.
Our focus is entirely on what is happening to the businesses
we own, the share price will take care of itself.
Be Patient
Many of history's great investors have suggested that the
key to their success lay not in what they did but rather in what they
did not do. They did not yield to their emotions or to the pressure to
do as the crowd was doing. Instead, they focused on the businesses they
owned and watched as their value compounded over time.
“When we own portfolios of outstanding businesses with outstanding managment's
our favorite period is forever”
- Warren Buffett
Buying a great business, and holding it for as long as the
attributes that makes it great remain in place, enables an investor to
take advantage of tax - efficient compounding. The compounding of one's
investment in a wonderful business is comparable to accepting an interest
- free loan from the government - with no payments due until such time
as the investment is sold.
We are extraordinarily sensitive to the tax situations of
our clients and remain focused on the only returns that really
matter - after - tax returns: the ones they get to keep.
At Goodman Private we believe that an investor will succeed
by coupling good business judgement with an ability to insulate his thoughts
and most importantly, his behaviour, from the ever - changing emotions that
swirl around the marketplace - and we live this common sense approach
everyday.
