"I am a better investor because I am a businessman, and
a better businessman because I am an investor." – Warren Buffett
"I am a better investor because I am a businessman, and a better businessman because I am an investor." – Warren Buffett
My goal at Mead Capital Management is to bring a business owner mindset to asset management. To me this is the only approach consistent with that of a businessman and an investor. My job is that of a full-time capital allocator: Partly through my job in commercial lending at a local bank assisting businesses finance their operations and growth; and partly through Mead Capital where I help clients benefit from business ownership in the form of acquiring part interests in public companies at rational prices. Each endeavor strengthens the other and results in me becoming a better investor and a better businessman.
Downside Protection First: Years of training in credit analysis focuses my attention on downside risk first, before looking for any upside.
A Simple Strategy: My attention is focused on finding great businesses to own. All accounts (including my own) are invested in the same strategy. Clients own their own separate accounts, which insulates them from the actions of other clients, and keeps costs very low compared to a hedge fund structure. Further, because my overhead costs are low, clients benefit from a lower starting management fee of 1%, and a declining fee structure based on tenure, not just higher assets under management.
A Focused Approach: Successful local business operators often have very few business interests (often just one business). It stands to reason that being a part owner in public businesses would benefit from a similar approach. Client portfolios usually have high degrees of concentration and as few as five to ten securities in the entire portfolio.
A Business Owner Approach: Consistent with being a business owner, clients are long-only (no shorting), and employ no margin or leverage. It is a back-to-the-basics approach that ignores much of the "noise" of the current financial marketplace. My clients and I are not seeking to outsmart fellow investors, but merely to participate in the benefits of owning great companies.
“It is occasionally possible for a tortoise, content to assimilate proven insights of his best predecessor, to outrun hares which seek originality or don’t wish to be left out of some crowd folly which ignores the best work of the past. This happens as the tortoise stumbles on some particularly effective way to apply the best previous work, or simply avoids standard calamities. Anyway, we hope so.”
– Charlie Munger, 1987 Chairman’s Letter to Wesco Shareholders