Value Investing
Value investing is a strategy famed by investors such as Warren Buffet and the University of Michigan’s own Charlie Munger. Classic value investing focuses on beating the market by investing in companies that regularly outperform major indices, such as the S&P 500. VVI follows these examples set by those before us to design a concentrated long-only portfolio, with a low inclination to sell. To us, value investing requires extensive research, patience, and hard work.
What We Look For
As value investors, we look for undervalued or discounted businesses. We believe these companies should have a higher public valuation than they do because of our qualitative and quantitative analysis. When the public market realizes the business should be valued higher, our discounted shares will increase in value. This enables our portfolio to have a large margin of safety and net consistent returns over an extended time horizon.
Our Process
O Possible Universe: VVI consists of several investment desks including healthcare, industrials, and energy. Investment teams will limit their search to US public companies that fall within that category.
O Company Screening: To limit the universe of possible equities, teams will screen for several desirable companies. Following initial research, the team will choose the equity to begin their investment pitch.
O Investment Pitch: Each week, a team will present a thorough investment pitch. These typically take 3-4 weeks and approach a company with a quantitative and qualitative analysis.
O Anti-Pitch and Discussion: Every investment pitch will have an anti-pitch. This added system provides a contrarian view of why not to invest in the company. Following the pitch and anti-pitch, the general club will discuss and verbally debate.
O Portfolio: Our portfolio is a select group of equities chosen by all of our members. These select businesses are thoughtfully and honestly discussed between the whole club, the investment committee, and the board before making a reasonably sound investment decision.
