INVESTMENT PHILOSOPHY
“We are dedicated to delivering solid returns,
independent of the market, with less risk.”
- Steven Abernathy
As valued investors, our goal is to make intelligent investments, and to grow assets carefully over time. We understand that delivering solid returns with less risk than the S&P 500 requires a unique portfolio, not one that simply looks like another index. When determining where to invest, we tend to focus on intrinsic value, and utilize our own in house analysis and research. We want to understand the micro-factors, and invest only when there is a substantial margin of safety. A key component of this strategy is our own innovation, Collaborative Investing®, which aligns our co-investors with us. We believe successful investing depends on the fusion of industry experts with financial experts. Furthermore, we believe that patient investing is a virtue, as long term gains are well worth the wait. Above all, we strive to manage and reduce risk, as protecting principal is our highest priority.
These are the core beliefs and strategies of our philosophy:
Preservation
Protection of the principal is always the first consideration. Through a diverse range of investment strategies, The Abernathy Group II funds are always hedged against the unknowable, whether it is abrupt changes in the market or unpredictable world events. We try to lower investment risk as much as reasonably possible, at both the individual investment and portfolio level.
Knowledge
Our own innovation, Collaborative Investing®, aligns experts in the medical and technology industries with financial experts, so we often have an informational advantage. We invest when we have an informational advantage or an analytical advantage. We thoroughly research fundamental investments, and only invest when we have a variant opinion not priced into the stock.
Value
When choosing where to invest, we focus on intrinsic value, free cash flow generation, and reinvestment of those cash flows. We place more importance on a company’s assets and free cash flow. Our goal is to purchase assets below or near tangible book value as change is in progress.
Consistency
In the long term, we pride ourselves in regularly outperforming the stock market and various benchmarks. We continuously work hard to develop a standardized, repeatable investment process that can be diagnosed and measured.
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