About Don Thurston

There is no Business Like Old Business

Investing money in equities should be similar to investing in any business. The discipline is the same, the method is different. The canny investor considers the basics of the business, evaluates risk does some profitability estimates and goes about organizing the venture and takes a patient long term view. Not so with many equity investors. It seems that otherwise sensible and competent business people take a totally different approach to buying and selling common shares as compared to other types of investments. All too often it is short term, knee jerk and with little or no planning.

A contributing factor is the very industry we are in. It is built on encouraging action. If none is taken then the investor fears missing an opportunity, or suffering losses. Immediate action is taken because it can, because the culture encourages one to do so and guilt accompanies inaction. Most often the quality of the underlying assets has not changed.

In contrast the corner stone of our philosophy is worth repeating which is to build a portfolio of good companies. Of course definitions differ but the one we like is captured in the following quote by the Chairman of a major pharmaceutical company. “….. We have to maintain a long term view and execute toward a company that is sound financially, solidly growing, with steadily increasing earnings…. We sometimes trip along the way, either because of changes in the world around us, sometimes, rarely I hope due to our own errors, but more often because growth is never a straight line”.

Once in the portfolio we keep the company until something of significance happens. The event could be the price is too rich, a superior investment emerges , or rarely because they trip due to their own errors.

Thus far this strategy has served the investor well.

Thanks for reading!

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