"Price is what you pay,
Value is what you get."
Our # 1 Fund Achievement:
Over 25 years, our greatest achievement is the fact that the Value Contrarian Fund has only experienced three negative calendar years. During this same period, the TSX Composite Index has had nine separate years of negative returns.
Why Value Investing?
At VCAM, we want to buy assets/companies whose price underestimates the value of the underlying assets or earnings (value investing) or their future potential (growth at a reasonable price). In either case, we are looking for a situation where the market is wrong. In essence, our job is to calculate what a company is worth and see if we can buy it at or below that price.
Our investment success is more likely to lie in discipline, consistency and minimization of errors, rather than in bold strokes or hitting that sensational home run.
What`s A Contrarian Investor?
In order to produce superior long-term returns, an investor has to be a “contrarian” – doing things differently from the crowd. This involves seeing value in assets/ companies that others have not yet recognized and that is not yet reflected in the share price. Often these are companies with temporary blemishes/problems.
At VCAM, we will not be pressured by investment manias or the risky practices of our less disciplined industry peers. Merely because everyone else is engaging in a particular business/investing activity, does not mean we also must follow the herd over the cliff. Yet, it often takes years before the crowd realizes it was mistaken.
What`s Our Investment Criteria?
Our broad objective is to achieve long-term capital appreciation. We achieve this through investments in common shares and other equity securities in mostly North American publicly-traded companies. Specifically, when available, we prefer to buy good businesses with shareholder friendly management.
What Is Meant by A Good Business (stock)?
A good business often contains the following characteristics: a high return on equity (ROE), excess free cash flow, reasonable debt levels, a low price earnings ratio (PE) and rising dividends. A large share buyback program is a further positive icing on the cake.
What`s Our Investment Timeline?
Investing in the stock market requires both time and patience. Portfolios will be managed on the basis of investors having a time horizon of five to seven-years. Historically, equities have outperformed fixed-income investments over the long-term. However, over the short-term (1-3 years), the stock market can be a volatile and nasty neighbourhood, as the 2007-2008 financial crisis clearly demonstrated.
Every manager is going to make investment mistakes, but the way one approaches the situation tells a lot about the firm. Likewise, no one can expect to win every set in a tennis match. If a manager never made a mistake, then he likely did not take enough risk. At VCAM, we are adamant about being forthright about our mistakes and more importantly learning from them. We strive to ensure that even a few misjudgements will not be catastrophic to the Fund or your account.
Tel: (514) 398-0808
Fax: (514) 398-9602
2016 Value Contrarian Asset Management