Portfolio Philosophy

How one applies a philosophy is as important as the philosophy itself. At Silver Heights, we feel that one of the greatest mistakes investors make is holding too many stocks and/or funds. It amazes us that so many investors and portfolio managers hold 50, 100 or more stocks in their portfolio.

Why would you ever want to invest in your 50^th best idea?

We believe that a select group of quality companies patiently acquired at favourable prices will result in superior long-term, risk-adjusted absolute returns.

We call our approach to assembling this collection of high-quality businesses Intelligent Concentration™.

• • Hold enough securities for diversification, but not so many as to dilute the impact of your best ideas
  • Only invest in those companies in which we have the highest conviction and only when the stock market's price provides you with a good margin of safety
  • Select investee companies and their weightings based on quality and price
  • Target long-term, absolute returns, not quarterly relative performance

We have a strong bias for high-quality companies. The higher the quality of the business and its people, the better the corporate performance. The better the corporate performance, the more likely you are to enjoy attractive returns.