Performance Driven Investing
Tradition Investment Management manages equity portfolios comprised of superior-quality companies that pay high dividends, are growing earnings, cashflows and dividends, and trade at a discount to our calculation of intrinsic value.
We are a registered investment advisor striving to deliver superior risk-adjusted returns to our clients and their families.
Growth Trumps Value
The price of a stock or its “valuation” is always important. However, our decades of experience indicate that growth is the number one factor for investors to consider before purchasing an equity. Combining growth and valuation leads us to own high-quality companies that have sustainable and growing businesses and trade below our estimates of intrinsic value.
Growth Provides Higher Retirement Income and Wealth
A stock of a company with a 4% yield growing at 9% can be a spectacular buy for an income or retirement investor if purchased at the right valuation, a stock price below its intrinsic value. In eight years, the dividend will have doubled; if the stock yield stays at 4%, the stock will also have doubled. The importance of growth, even for income investors, cannot be overstated.
Growth Drives Business and Stock Values Higher
The quality of the business determines growth in revenues, earnings, and free cash flow. Big winners in “Growth Stocks,” more than 12% growth, and “Hypergrowth,” more than 20% growth, are determined by the qualitative business fundamentals. Valuation is less important than the level and duration of the high growth. For a company with 25% growth for ten years, today's purchase price does not need to be precise because the compounding effect of “Hypergrowth” will result in the company being 9.3 times larger in ten years than it is today. This does not mean you can buy it at any price, but it does mean you can buy it at a multiple of the valuation of an average stock.
History
Tradition and its predecessor companies have a long record of providing above-market returns through a repeatable and sustainable investment process.
Co-Invest
We invest our own money alongside our clients in the same strategies.
Long-Term
We are investors in quality businesses with a typical holding period of 3-5 years.
We invest based on business value drivers, such as: Innovative Products Great Brands Dominant Distribution Exceptional Resources Essential Patents Formidable R&D Management & Leadership
We focus on the business fundamentals such as products and services, brands, patents, distribution, resource base, and management. We believe that the stocks of superior companies will overtime produce solid investment returns for our clients.
