At T&T Capital Management, we focus on deep value investing principles – on putting our clients’ best interests first for long-term investing. We’re inspired by the likes of Warren Buffett, Benjamin Graham, Martin Whitman, Bruce Berkowitz, Wilbur Ross, and Seth Klarman.
Our team works with stocks, bonds, options, and all other securities. When taking equity in a company, we view ourselves as a partial owner of the business, remaining fully invested in the company’s success. This mindset allows us to be comfortable with the long-term perspective,since we only align ourselves with management structures that have their shareholders’ best interests in mind. In measuring the quality of an investment opportunity, we pay careful attention to key measures, such as return on invested capital, free cash flow generation, and leverage ratios. We make strategic decisions with our stakeholders’ best interests in mind.
Understanding the intrinsic value of a security is at the core of our approach to the market. Leveraging our years of experience and expertise in the industry, we determine a security’s intrinsic value and then set out to purchase it at a substantial discount – typically 50-60% below the intrinsic value. This is designed to ensure an adequate and reliable margin of safety.
Instead of getting blinded by the amount we can earn from an investment, we mitigate risk by first focusing on how much we could lose. We measure risks in absolutes, as opposed to relatives. If the market is has turned away from our favor and we can’t find good investment opportunities, we would rather sit on cash than make poor investment choices. This is how we not only build wealth but protect the wealth we already have.
When evaluating investment opportunities, we begin with the balance sheet, as opposed to the Wall Street approach that has a primary focus on the income statement. The balance sheet tells the story of a company’s liquidity, and it filters out the quality of both its assets and liabilities. This is where we begin to find answers to our biggest questions about the company’s capital structure and, potentially, its liquidation value. We evaluate inventories and company-owned real estate to determine an appropriate net asset value, establishing a clear view of the business’s worth for its owners.
Next, we look at the statement of cash flows. This allows us to gauge the quality of earnings the company is generating. We believe it is imperative to follow the cash to see the true value of a company without running the risk of depending on earnings data on the income statement, which could easily be manipulated by various factors. Companies that are generating strong free cash flows tend to have a higher quality earnings stream.
Your investments are so much more than numbers on a monthly report – it’s how you will pay for your lifestyle after you decide to retire. Partnering with investment advisors you can trust is essential for your continued financial stability.
We believe in getting to know you and your unique needs, in building a relationship, in understanding your goals. Get started on your FREE portfolio review with one of our Senior Investment Advisors. You’ll get to know us, and we’ll get to know you. Then we can talk about what you can be doing to maximize your retirement plan.