Investment Philosophy

Our in-house research effort enables us to identify investment opportunities and drives all investment decisions. This work combines a macro-economic approach with thoughtful analysis of trends in major industrial groups and detailed evaluation of companies. Methods embody classical economic and business analysis to understand market position, growth prospects, and cost structures, among other factors. The goal is to understand businesses well and to be able to determine what constitutes fair value for an enterprise.

In pursuing this objective the firm relies on a variety of sources of information, including published annual and interim reports as well as other documents that may be available to develop insight and understanding. Industry publications and analysis prepared by third parties are frequently used. Attendance at industry fairs and conferences are also helpful. In each case LBA personnel will contact and meet with representatives of companies that are being considered for investment. Our research includes the development of financial forecasts for each company considered with the cooperation of senior management. We believe this is an important part of our evaluation process, helping us better understand the various influences on profitability and possible changes.

The team gives careful attention to the price paid for all investments both absolute and relative to other opportunities. Discipline in comparing market prices to internally developed valuations and ensuring we do not overpay is important to long term results.

The scope of our work is global. LBA seeks and evaluates attractive industries and companies around the world and measures them against their international competitors.

Intrinsic value is created in a business over the long-term. To capture that value, the team strives to develop insight into fundamental trends that will have a longer term influence on an investment.

Since LBA's inception over 25 years ago, the firm has pursued the same investment approach in all asset classes and has applied this approach consistently across all portfolios. The firm uses no external managers, and all investment decisions are made based on research performed by the firm's portfolio management team.

LBA's goal is to build portfolios that are exposed to diversified economic activity in many industries and regions of the world. In equity investments, we focus on companies that have strong balance sheets, steady cash flow, solid dividend yields and the prospect for appreciation on the strength of improved performance and market re-valuation over a three to five year time horizon. In fixed income investments, we emphasize holding high quality bonds that meet the objectives of stability and income. We focus on studying the world and North American economies to develop views on future movements in interest rates to position the portfolios appropriately. We also spend time looking at individual securities and their particular attributes, such as credit risk, inflation protection, embedded options, and other characteristics.