INVESTMENT OBJECTIVE

Our investment objective at CT is straightforward. We seek to deliver absolute returns in excess of both the S&P/TSX Index and the S&P500 Index  over the long term. We seek to accomplish this objective through investments in a concentrated portfolio, primarily in equities from any sector and capitalization scale.

CORPORATE OBJECTIVES

In addition to delivering superior long-term returns to, you (our investors), we have some additional corporate objectives at CT, namely:

To protect and preserve our investors capital by being patient, selecting quality investments at attractive prices and by avoiding leverage.
To invest “properly” by positioning the firm to be free of outside influence and follow a disciplined value investing philosophy.

Investment Philosophy
At CT we practice bottom-up fundamental analysis combined with the value investing methodology taught by our investing heroes: Benjamin Graham, Philip Fisher, Warren Buffett and Charlie Munger. Value investing is all about buying an interest in a quality business for less than its intrinsic value. That discount provides us with our margin of safety to safeguard our clients’ investments.

What We Look For — When selecting investments we scour our universe of stocks that possess the following characteristics:

Great Businesses: We prefer to stick to investments in businesses that we understand, with attractive underlying economics and that possess durable competitive advantages.

Solid Management: We seek investments in companies that are being run by competent and shareholder-friendly management teams.

Margin of Safety: We patiently wait for the stock market to offer us a price that allows us to buy a stock for a sufficient discount to our estimate of its intrinsic value.

Patience – Having the proper temperament is key to successful investing. Once a stock is purchased for the Value Fund, our job is to simply monitor the underlying business to make sure that there is no fundamental change to our investment thesis. By being patient we allow time and compounding to work their magic and believe that in time, the stock market will ultimately value our investments properly.

How we Measure Risk — At CT we reject the Efficient Market Hypothesis and the premise that volatility is the proper way to define and measure risk. Instead, we take the view that risk is best defined as the risk of a permanent loss of our clients’ capital. We believe that our style of active portfolio management combined with our disciplined value approach will deliver attractive returns to our clients over the long-term.

Our Best Ideas — The Value Fund will be managed as a concentrated or “conviction” portfolio. The size of our positions in various stocks varies materially based on our level of conviction at the time of purchase and the subsequent market action. The benefits of broad diversification make sense for some but we prefer to make a few large bets on 15-25 situations that we understand well and where we like the risk/reward trade-off. In other words, our best ideas. We prefer to assume some shorter term volatility in exchange for what we expect will be longer-term outperformance.

Aversion to Leverage — We prefer to avoid the use of leverage. We believe that doing so provides us with the benefit of never needing to sell when market conditions are difficult.