Investment Philosophy

The company's investment philosophy is derived from a belief that many investors have a short-term investment horizon and tend to cling to indexes, focus on consensus trades, and chase momentum -- often leading to buying securities when they are expensive and selling when they are cheap.  Instead, the investment philosophy of BCM is to combine research-driven value investing with a longer time horizon, in order to capitalize on value opportunities and market inefficiencies.  This longer-term investment horizon also helps to moderate transaction costs and allow for greater tax efficiency, relative to higher-frequency trading strategies.


Put simply, BCM's value-investment strategy entails looking beyond momentum and sentiment and seeking assets that are substantially undervalued, relative to intrinsic value, and holding them until they approach fair value. Conversely, the company attempts to avoid securities or asset classes that are believed to be overvalued.


The assessment of intrinsic value will be derived from fundamental analysis that utilizes both a top-down and bottom-up analytical approach which capitalizes on Mr. Barac's extensive institutional experience in corporate securities analysis. Investment allocations to different asset classes (e.g. stocks, bonds) may vary considerably, over time, depending on a value assessment of the different asset categories.


Risk management is fundamental to the overall integrity of the investment strategy which focuses extensively on capital preservation and downside risk.  Considerable focus is put on credit and general risk analysis to determine risk/reward and the appropriate sizing of positions.  BCM's general strategy further controls risk by limiting exposure to any one single-name security and avoiding illiquid stocks, mortgage-backed securities, or other illiquid assets.