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Successful investing requires a unique set of skills. The accomplished investor must know how to analyze companies in a way that identifies common measures of value across disparate industries and countries. Beyond that, a good investor must be disciplined enough to only buy stocks that meet stringent value criteria, patient enough after the purchase to ignore short-term vagaries that have no real impact on a stock’s value, and yet flexible enough to respond quickly to changing fundamentals or emerging opportunities. The goal of French Broad Global is to identify stocks selling at the greatest discount to their intrinsic value using fundamental analysis. Price is paramount because a great company by itself is not enough. Our stock valuation methodology factors in a company’s country of domicile and industry. Countries and industries perceived to be riskier necessitate either a discount or cheaper valuation multiples to meet our purchase requirements. Subsequently, country and industry breakdowns, as a percentage of a portfolio, are a derivative of risk-adjusted individual stock valuations. In simpler terms, FB Global buys the stocks selling at the greatest discount to their risk-adjusted intrinsic value. This framework creates upper limits for country and industry weightings based on our overall judgment. Our sell discipline is based both on a stock’s valuation and its relative valuation to all stocks. Stocks provide superior long-term returns versus other asset classes. Global investing can augment returns and provide diversification benefits. Value investing outperforms other investment styles over time. Above all, we are long-term investors. |
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