Our Investment Philosophy
Investment management is not a sprint, it’s a marathon. Our long-term approach to the management of our clients’ assets is very heavily influenced by the writings of the great investor Benjamin Graham, generally thought of as the “father” of modern value investing. According to Graham, “an investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.” At Eukles Asset Management, we thoroughly analyze every investment before committing a dime of our clients’ capital. We do not speculate.
Our goal is to identify “truly great” companies with long-term growth prospects, and then own them at the right price. Owning an investment at the right price is critical to our long-term success, because even a “truly great” company can be a bad investment…if we pay too much for it. So we “get under the hood.” That is, we thoroughly analyze every prospective investment to make sure it meets our definition of a “truly great” company, and it is at a price that will allow for our long term target rate of return. On any given day, we know what companies we would like to own. But we will only buy them if they reach our price.
“Truly great” companies share common characteristics, such as a history of strong returns on equity and relatively high returns on capital. They also possess something called a “sustainable competitive advantage,” often referred to as an “economic moat.” “Economic moats” shield truly great companies from competition, allowing them to maintain strong earnings growth and high returns on equity and capital. At Eukles Asset Management, we believe that investing in truly great companies is the best way to generate superior returns over the long run.
Investing involves risks including possible loss of principal. There is no assurance that the techniques and strategies discussed are suitable for all investors or will yield positive outcomes.
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