Hayes Asset Management’s investment philosophy is based on the understanding that investments are chosen on the basis of value, not popularity (bottom-up, fundamental value investing). Value investing has three fundamental characteristics, as originally discussed by Ben Graham and David Dodd in 1934.
According to Graham and Dodds, the three fundamentals of value investing are as follows:
- Prices of financial securities are subject to significant and fickle movements.
- Despite the volatility in the market prices of financed assets, companies do have underlying or fundamental economic values that are stable and can be measured with reasonable accuracy by a diligent and disciplined investor.
- The strategy of buying securities only when their market prices are significantly below calculated intrinsic value will produce superior returns over the long run. Graham referred to the gap between value and prices as “the margin of safety.”
Following this philosophy has has proven to be a conservative as well as profitable approach for our clients since 1996. We look forward to showing you how a value investment strategy will serve your investment objectives now and into the future.