Our Philosophy
WiseOwl Capital, LLC practices investment management principles derived from a combination of the work of the late Benjamin Graham, author of "The Intelligent Investor" and "Security Analysis" (Buying cheap with a "margin of safety"), Phillip Fisher (looking for companies with long pathways for reinvestment) and Warren Buffett and Charlie Munger (Buying good businesses at reasonable prices). We seek to appraise the worth of the company by determining its "intrinsic value", which is the value a knowledgeable businessman would pay to acquire the company. Depending on the type of investment, the valuation can be done through an analysis of asset values or cash flows.
As we are concerned with capital preservation and not just capital appreciation, we only make purchases when the investment is priced in the market at a substantial discount to our conservative calculation of "intrinsic value"; this provides us with a "margin-of-safety", or a buffer, in case we possibly miscalculated in some manner or have some preferential bias.
Selling is almost as much of an art as it is a science, as sometimes market prices are disconnected from a reasonable valuation. We attempt to mitigate the indecision by only selling when:
(1) The investment approaches our intrinsic valuation
(2) Reinvesting the capital in another investment that is more compelling and offers a larger "margin-of-safety", or
(3) The original investment thesis has been altered.
Although adhering to these principles results in often being contrarian to the general market views, we are still looking for higher quality investments instead of hoping to get the last puff from a cigarette bud. To conclude our philosophy, we are looking for "above average investments that are priced in the market at a below average prices".
As we are concerned with capital preservation and not just capital appreciation, we only make purchases when the investment is priced in the market at a substantial discount to our conservative calculation of "intrinsic value"; this provides us with a "margin-of-safety", or a buffer, in case we possibly miscalculated in some manner or have some preferential bias.
Selling is almost as much of an art as it is a science, as sometimes market prices are disconnected from a reasonable valuation. We attempt to mitigate the indecision by only selling when:
(1) The investment approaches our intrinsic valuation
(2) Reinvesting the capital in another investment that is more compelling and offers a larger "margin-of-safety", or
(3) The original investment thesis has been altered.
Although adhering to these principles results in often being contrarian to the general market views, we are still looking for higher quality investments instead of hoping to get the last puff from a cigarette bud. To conclude our philosophy, we are looking for "above average investments that are priced in the market at a below average prices".