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Volatility have historically offered opportunities for patient shareholders

June 18, 2008

Mark Hillman shareholder letter: "Times of crisis, fear and capitulation are seldom enjoyed by investors as volatility often concurrently increases. However, these situations have historically offered opportunities for patient shareholders to increase their equity exposure. We believe that the best way to allocate capital is by investing in individual companies which we believe have a sustainable competitive advantage at times when we think their shares are undervalued."

"In our opinion, this is the best way to achieve strong performance over the long-term. We feel that our focus on the underlying business and competitive position of each firm has served us well in the past and we anticipate it will continue to do so over longer periods of time. "

"Each period of contraction or expansion has variant root causes and consequences, some calculated while others unintended. In response to weak GDP earlier in the decade, the Federal Reserve aggressively cut interest to stimulate the economy. While necessary at the time, one unintended consequence, coupled with some creative risk management approaches on Wall Street, was the dramatic price increases in housing. A period of stability and euphoria in any asset class is often followed by a period of instability, as is currently the case in the housing and leveraged finance markets respectively. The U.S. economy has remained flexible and overcome past periods of weakness and we expect it to continue to do so over time."

Read the complete shareholder report


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