Over thirty-seven years, I have developed a coherent framework for evaluating businesses and making capital allocation decisions. This framework has been tested through multiple market cycles and refined through countless conversations with company executives, industry experts, and fellow investors. It is a living system of principles, one that evolves with experience and guides every decision I make.
The foundation of my investment approach is a relentless focus on business quality. Not every company deserves a place in a long-term portfolio. I seek businesses that possess durable competitive advantages, the kind that allow them to earn attractive returns on capital year after year, decade after decade.
What does quality look like in practice? It begins with a business model that is difficult to replicate. This might be a powerful brand that commands customer loyalty, a network effect that grows stronger with each new user, or a cost structure that competitors cannot match. These advantages create what some call economic moats, protective barriers that shield profits from competitive erosion.
Beyond the business model, I look closely at management. The executives who run a company are stewards of shareholder capital. I want to see leaders who think like owners, who allocate capital with discipline, and who communicate honestly about both successes and setbacks. A mediocre business with excellent management can surprise you. An excellent business with mediocre management will eventually disappoint.
Cash generation is another hallmark of quality. The best businesses convert their earnings into free cash flow, money that can be reinvested for growth, used to strengthen the balance sheet, or returned to shareholders. Companies that consume cash, unable to generate it consistently, are often more fragile than their income statements suggest.
A wonderful business can become a poor investment if purchased at the wrong price. This is one of the most important lessons I have learned, and it is one that many investors learn only through painful experience. Valuation discipline is the practice of ensuring that every investment offers a margin of safety between the price paid and the underlying value received.
Markets are driven by emotion as much as by reason. In periods of optimism, investors bid prices far above what businesses are worth. In periods of fear, they sell quality assets for fractions of their intrinsic value. My task is to remain anchored to fundamental worth regardless of where sentiment happens to be.
I use multiple valuation approaches to assess each investment opportunity. No single metric tells the complete story. I consider earnings multiples, but I also examine free cash flow yields, replacement costs, and the value of comparable businesses in other markets. When these different lenses point in the same direction, my confidence increases. When they diverge, I dig deeper to understand why.
Patience in valuation is just as important as patience in holding. I am willing to watch a company for years, waiting for the market to offer a sensible entry point. The opportunity cost of waiting is real, but it is far smaller than the cost of overpaying.
My investment horizon is measured in years. Quarters are too short a lens for serious wealth building. This perspective is increasingly rare in a world obsessed with short-term results, but it is essential to the way I think about building wealth.
When you own shares in a business, you own a piece of its future earnings. Those earnings compound over time, and the longer you hold, the more powerful that compounding becomes.
Frequent trading is the enemy of long-term returns. Every transaction carries costs, both the explicit costs of commissions and spreads, and the implicit costs of taxes on realized gains. More importantly, frequent trading encourages reactive thinking, pulling attention away from business fundamentals toward short-term price movements.
I have held positions for a decade or more when the underlying businesses continued to execute well. During that time, share prices fluctuated, sometimes dramatically. Headlines warned of recessions, geopolitical crises, and industry disruptions. Through it all, the best companies continued to serve their customers, invest in their futures, and generate cash for their owners.
Time is the friend of the quality business and the enemy of the mediocre one. When you own excellent companies, time works in your favor. When you own poor ones, every passing year reveals more of their weaknesses.
My career has taken me from the trading floors of London to the research desks of New York, with countless stops in between. This journey has taught me that investment opportunities do not respect national boundaries, and that the best investors must be willing to look beyond their home markets.
Many investors suffer from a condition that academics call home bias. They concentrate their portfolios in familiar domestic companies while ignoring opportunities abroad. For a Canadian investor, this might mean holding predominantly Canadian equities even when more attractive valuations exist in Europe or Asia. Home bias feels comfortable, but it leaves money on the table and increases concentration risk.
My approach is deliberately global. When I evaluate a company, I compare it not only to its domestic peers but also to similar businesses in other markets. A consumer goods company in London might trade at a significant discount to a comparable firm in New York, even though both serve similar customers and face similar competitive dynamics. These cross-border valuation gaps create opportunities for patient investors willing to do the work.
For Canadian investors in particular, I believe a global perspective is essential. The Canadian market is excellent in certain sectors, notably financial services and natural resources, but it lacks depth in others. A truly diversified portfolio must look beyond Canadian borders to capture the full range of opportunities available in today's interconnected world.
Conviction without research is merely opinion. The confidence I bring to investment decisions is earned through rigorous, systematic analysis. Before I invest in any business, I want to understand it deeply, not just its financial statements, but its competitive position, its industry dynamics, and the character of its leadership.
My research process begins with the fundamentals. I study annual reports, quarterly filings, and investor presentations. I build financial models to understand how a business generates revenue, where its costs lie, and how its profits translate into cash. This quantitative work provides the foundation, but it is only the beginning.
The most valuable insights often come from qualitative research. Over the years, I have met with hundreds of management teams across Europe and North America. These conversations reveal things that spreadsheets cannot capture. You learn whether executives are candid about challenges or prone to spin. You sense whether they think like owners or like hired managers.
Industry context matters as much as company specifics. A business does not operate in isolation. It faces competitors, suppliers, customers, and regulators. Understanding these relationships helps me assess whether a company's advantages are sustainable or vulnerable.
The pursuit of returns must be balanced against the imperative of preservation. Capital that has been accumulated over a lifetime, or across generations, deserves to be treated with respect. My philosophy places significant weight on protecting what has already been built, even as I seek to grow it further.
Risk management begins with position sizing. No single investment, no matter how attractive, should represent such a large portion of a portfolio that its failure would be catastrophic. I prefer to spread capital across a manageable number of high-conviction positions, each sized according to its risk-reward profile.
Diversification across geographies and sectors provides another layer of protection. The economy of any single country or the fortunes of any single industry can turn unexpectedly. A portfolio concentrated in one region or one sector may perform brilliantly in good times but suffer disproportionately when conditions change.
Building wealth matters, but so does keeping it. The most successful long-term investors are those who avoid catastrophic mistakes. They resist the temptation to chase speculative opportunities. They maintain discipline when markets become euphoric. They remember that the first rule of compounding is to avoid interrupting it.