Our firm specializes in concentrated, long-term, and value-oriented portfolios. We believe our independent research, consistent and repeatable process, and rigorous risk management practices lead to superior performance over a complete market cycle.
Studies have shown that a portfolio of 18 properly-selected common stocks provides more than 90% of the benefits of diversification. Also, as the number of individual stocks in a portfolio increases, the impact of each position on investment returns declines. For these reasons, Black Cypress equity portfolios are structured around an average of 25 individual equity positions. Our portfolios therefore maximize the benefits of diversification while still allowing our individual investment ideas to each meaningfully impact our returns.
Black Cypress invests with a multi-year time horizon in mind. Our competitors, bound by short-term performance expectations, make decisions based on what may happen in the next couple of quarters. We instead concern ourselves with each of our investment’s long-term (3 to 5+ years) earning potential–not whether a company will beat earnings estimates in the next quarter. Our unconstrained time horizon leads to better-controlled emotions, lower turnover, and superior decision making in the face of panic or irrational exuberance.
Every investment decision at Black Cypress, whether in determining capital allocations to different asset classes or in selecting a particular stock, is rooted in the tenets of value investing. We invest in companies as if we are buying a business in its entirety, becoming partners with management. We invest in companies when the price we must pay is adequately lower than the value we will receive. Put another way, we invest in companies when they are on sale. And we let the market work to our benefit, by taking advantage of periods of market enthusiasm to sell and periods of short-sighted and widespread fear to buy.
Learn how we see the forest and the trees.