Small Cap Value

We believe the market is a forum for players to interact and a mechanism in which price discovery is allowed. The collective perception of the data analyzed at that place and time creates the market, regardless of the rationality of the players involved. Market extremes represent times when the majority is acting most irrational. This “game theory” like pattern provides the framework for our investment strategy of seeking to buy financially strong companies paying above-average dividends, but which are currently out of favor.  Over time, companies meeting this profile often see a resurgence of earning power followed by renewed enthusiasm and higher market prices.

We utilize four tenets incorporating both quantitative and qualitative methods to understand and measure market biases and execute our philosophy:

• Multiple Driven: screen to look for stocks that have fear bias
• Price & Earnings Momentum: help to uncover recency and loss aversion bias
• Quality: fundamental analysis to help with downside protection and capture halo effect bias
• Narrative:  Understand the biases in the market and avoid bandwagon effect and anchoring bias