Investment Philosophy
The Foresight Value Fund seeks to achieve its
investment objective of long-term appreciation of invested capital, while
limiting the risk of a permanent loss of capital, by principally investing in the common stock of
companies we believe to be safe and undervalued. We consider a company to be a safe investment
if it is either debt free or we believe it has sufficient resources to adequately fund its debt.
We consider a company to be undervalued when its stock trades at prices that value the company
significantly less than what we believe to be its intrinsic or underlying
business value. The intrinsic value of a company is the greater of either
its value as a going concern, or the value that would be realized if
operations were terminated and all assets sold.
The conventional definition of "value"
investing is buying stocks of companies identified as being undervalued
based on absolute or relative value measures, such as low ratios of stock
price to earnings or book value, as opposed to "growth"
investing, where companies with high earnings growth rates are favored. We
do not acknowledge this dichotomy between "value" and
"growth", understanding that growth is a necessary component
used in determining the intrinsic value of a company as a going concern.
At any given time the Fund expects to typically own the
common stock of fifteen to thirty companies. It is our belief that a
focused portfolio of securities representing our best ideas is preferable
to a portfolio of hundreds of securities, where less esteemed stocks are
purchased solely to diversify the portfolio to the detriment of long-term
performance. Our ten largest portfolio holdings
are updated quarterly on this site.
We don't just espouse the benefits of our investment philosophy,
we back up our words with action. Fund management has a significant percentage of their
personal net worth invested in the Fund. We eat our own cooking!
To learn more about the basis for our investing
philosophy and other topics of potential interest to investors, check out
our Recommended Reading page!
