We have come to a keen focus on high-quality growing and advantaged businesses with the benefit of years of visiting, analyzing, and investing in some of the world’s great companies. The structural, competitive, and economic “advantages” we seek in portfolio holdings are often most important during periods of economic dislocation and turmoil as they provide business owners and managers with flexibility when it is most critical. If we are correct in our assessment of these businesses and even close in our estimation of their underlying values, our long-term investment results have the opportunity to benefit from two sources of returns: growth in the value of the business and a closing of the valuation gap. We attempt to pay no more than $70 for businesses that we believe are worth $100 dollars today and are likely to be worth at least $110-$115 a year from now (and even more in subsequent years).
• Conservatively positioned balance sheets that allow them to be nimble when others are fearful by investing in their organic growth, making strategic and attractively-priced acquisitions, or repurchasing their own shares.