A Different Kind of Investment Company

Date Added: May 23, 2018 | Comments Off on A Different Kind of Investment Company | Filed under: Blog

I’ve been spending time recently thinking about the central principles on which Takota was founded with respect to our investing, our relationships, and our decision making, and how we are doing in terms of living by those principles every day.

I’ve always wanted to have a different kind of investment company, one which is similar to the way in which Warren Buffett ran his original investment partnerships.

We got much of the way there at my predecessor firm Aquilon Capital. However, we still went down some paths that most young investment companies will go down as they try to build their businesses, paths which I have no intent of going down again at Takota.

Here are a few central principles that guide our actions:

Principle #1

Everything is viewed through the lens of value. We look at everything in terms of how much value we are giving, and how much value we are receiving. This applies to our investment management business as well as to our investing. An asset is a good asset at one price and a bad asset at another price. For example, a company may be a great company but that does not mean that it will be a great investment if its price fully discounts the fact that it is a great company.

Principle #2

Much of the time most of the market is efficiently priced. In order to create incremental performance over that which an investor could achieve through a simple low cost index investment, we will need to travel down a different path. In order to find mispriced assets we will delve into the unpopular, the unknown, the illiquid, or the difficult to understand. However, in doing so, we will endeavour to remain within our own particular circle of competence. At times, perhaps even for extended periods of time, this path will be unpopular but based on 30+ years of experience it will ultimately prevail in the form of superior investment results.

Principle #3

We focus our thinking on our very best capital accumulation opportunities, except for our partners who need income. For income investors we diversify our sources of income.

Principle #4

Time spent ensuring we only establish direct relationships with like- minded customer partners is time well spent. There will be no hockey tickets, fancy dinners, or other perks that are typical of investment firms that have nothing to offer in the way of real value. In exchange for your committing your hard earned investable cash with us, we will give all of our effort to creating performance for you. This is how, over a reasonable period of time, we wish to be judged and compensated.

Principle #5

We will invest right alongside of you in all of the investment opportunities that we uncover.

Principle #6

We will communicate openly and honestly with you in good times and in bad, whether we win or lose on any particular investment. In buoyant times we will counsel caution. In difficult times we will counsel discipline, patience and opportunism.

Scott


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