The DLS Investment Philosophy
A disciplined approach to value investing that combines rigorous fundamental analysis with behavioral awareness. These principles guide every analysis and recommendation.
Philosophy Categories
Valuation
3 principles
Quality Assessment
3 principles
Risk Management
2 principles
Behavioral Finance
2 principles
Macro Awareness
1 principles
Sector Analysis
0 principles
Timing & Patience
2 principles
Portfolio Construction
2 principles
All Principles
15 principlesValuation
Always start with a rigorous assessment of intrinsic value before considering market price. The market is a voting machine in the short term but a weighing machine in the long term.
— DLS Investment Philosophy
Valuation
Never pay full price. A 25-30% margin of safety provides protection against analytical errors and unforeseen events. The bigger the discount to intrinsic value, the better the risk/reward.
— DLS Investment Philosophy
Valuation
Use DCF, comparable company analysis, and precedent transactions together. No single method tells the whole story. Triangulate to build conviction.
— DLS Investment Philosophy
Quality Assessment
Seek businesses with sustainable moats - brand power, network effects, switching costs, or cost advantages. A great business at a fair price beats a fair business at a great price.
— DLS Investment Philosophy
Quality Assessment
Invest with management teams that think like owners, allocate capital wisely, and communicate honestly. Track record matters more than promises.
— DLS Investment Philosophy
Quality Assessment
ROIC above cost of capital is the ultimate measure of value creation. Consistently high ROIC signals competitive advantage and pricing power.
— DLS Investment Philosophy
Risk Management
Size positions based on conviction and risk. High conviction ideas warrant larger positions, but never so large that being wrong is catastrophic.
— DLS Investment Philosophy
Risk Management
Define exit criteria before entering a position. Know what would make you wrong and be willing to admit mistakes quickly.
— DLS Investment Philosophy
Behavioral Finance
The best opportunities often lie where others fear to look. Be greedy when others are fearful, but only when fundamentals support the thesis.
— DLS Investment Philosophy
Behavioral Finance
Actively seek out disconfirming evidence. The strongest investment theses survive rigorous challenge. If you can't articulate the bear case, you don't understand the investment.
— DLS Investment Philosophy
Macro Awareness
Understand where we are in the economic and credit cycles. Different strategies work in different environments. Don't fight the Fed, but don't blindly follow it either.
— DLS Investment Philosophy
Timing & Patience
The ability to wait for the right pitch is a competitive advantage. Most investors trade too much. Time in the market beats timing the market, but entry price still matters.
— DLS Investment Philosophy
Timing & Patience
Don't cut flowers and water weeds. Great businesses compound over time. Selling too early is often more costly than holding through volatility.
— DLS Investment Philosophy
Portfolio Construction
A focused portfolio of 15-25 high-conviction positions outperforms over-diversification. Know your positions deeply rather than spreading thin.
— DLS Investment Philosophy
Portfolio Construction
Diversify across risk factors, not just names. Understand correlations and how positions might behave together in stress scenarios.
— DLS Investment Philosophy
Words of Wisdom
"Price is what you pay. Value is what you get."
— Warren Buffett
"The stock market is a device for transferring money from the impatient to the patient."
— Warren Buffett
"In the short run, the market is a voting machine but in the long run, it is a weighing machine."
— Benjamin Graham
"Risk comes from not knowing what you're doing."
— Warren Buffett
"The four most dangerous words in investing are: 'This time it's different.'"
— Sir John Templeton