Value Investing Approach
Our objective is to achieve superior risk-adjusted investment returns over the long term.
In order to meet this goal, we developed an investment process founded on the core principles of Value Investing: buying shares in companies with durable competitive advantages, when the intrinsic value of these businesses is meaningfully higher than their current share prices.
Our perspective in evaluating the intrinsic value of a business is to estimate the price that a private buyer would be willing to pay for the entire company. When we buy shares in a company, we do so with the intent to own it on a permanent basis, enabling us to focus on long-term drivers of profitability and growth. Beyond financial analysis, we strive to build relationships with the leaders of our portfolio companies to strengthen our investment process.
The Rochon U.S. Portfolio
Implementing this Value Investing approach, Giverny has created and manages the Rochon US Portfolio. This portfolio invests in companies that derive the majority of their revenues from the United States and the Rochon US Portfolio is a cash portfolio used as the basis for the allocation of individual client portfolios.
The Rochon US Portfolio typically includes between 20 and 30 holdings. We focus our investments on our most compelling ideas while also maintaining appropriate portfolio diversification. Our benchmark is the S&P 500.
Individualized Service Structure
Giverny believes that its client accounts should be separately-managed rather than comingled. This affords each client a high level of flexibility to accomodate specific needs while invested in the Rochon US Portfolio. Further, the separately-managed structure enables our clients to choose their most appropriate account structure, whether a Cash Account, Traditional IRA, Roth IRA, College Saving Plan or Trust Account.
Giverny Capital Advisors does not assume control of client assets, but rather employs the services of a third-party custodian in order to ensure independent reporting. TD Ameritrade Institutional serves this role for our clients and also provides 24/7 access to client account information. Giverny can easily accommodate clients who wish to choose their own custodian.
Giverny aligns its compensation to the value of your portfolio by charging a fixed-percentage fee based on assets under management. Our compensation increases when the value of your portfolio grows; we do not earn fees based on transactions and commissions incurred on your account. We believe that this creates an environment where incentives and actions are aligned.
Our philosophy at Giverny is one of partnership and accountability.
We believe in maintaining a clear line of communications with our clients. We send quarterly statements to our clients detailing portfolio performance, along with a letter providing details on our investments. At our Annual Meeting, clients are invited to ask questions to the Giverny Portfolio Managers in an open microphone forum. Further, clients receive a statement from their custodian providing independent appraisal of their account
The most important part of Giverny’s commitment to transparency is maintaining an open dialogue with our clients. We encourage and welcome our clients to contact any member of the team. For additional information about our firm and copies of our annual letters, please visit Giverny Capital.