Investment Philosophy
Alden Graff’s investment philosophy is founded on six core tenets that have remained constant since our inception over 25 years ago. These principles are not simply guidelines; they form the foundation of all investment activity across our firm and reflect our commitment to disciplined, risk-conscious portfolio management.
1. Primacy of Risk Control
Our foremost objective is to deliver investment performance that is superior relative to the risk assumed. We do not pursue returns at any cost. Rather, we prioritize the preservation of capital, especially during periods of market stress. It is during adverse conditions that true investment discipline is tested—and validated. Avoiding substantial losses enables long-term compounding and serves as the cornerstone of our process.
2. Commitment to Consistency
We believe a strong investment track record is best achieved through consistent execution and a disciplined approach. We do not view dramatic fluctuations in performance as acceptable. Our goal is to maintain a high probability of success over time, rather than rely on isolated moments of outperformance. This requires a long-term mindset and unwavering adherence to process.
3. Focus on Market Inefficiency
We invest only where we believe a competitive advantage can be earned. This requires identifying markets or segments that are inefficient—where information asymmetry, investor behavior, or structural limitations create opportunity. In efficient markets, where information is rapidly and uniformly priced in, we do not believe consistent outperformance is feasible.
4. Specialization as a Prerequisite for Excellence
Each strategy we manage is highly specialized, with a clearly defined mandate. We do not dilute focus by attempting to be all things to all clients. By maintaining specialization, we ensure that our investment teams operate with clarity, accountability, and deep domain expertise. Clients know precisely what they are investing in and what they can reasonably expect.
5. Bottom-Up Orientation
We do not rely on macroeconomic forecasts or predictions regarding interest rates, inflation, or market direction. Instead, our investment decisions are driven by rigorous bottom-up research, rooted in a deep understanding of companies, sectors, and securities. Portfolio construction is used to manage risk, not to express speculative views on macroeconomic variables.
6. Rejection of Market Timing
We do not attempt to time markets, and we do not raise cash in anticipation of short-term volatility. Provided that fundamentally attractive opportunities are available, we remain fully invested. Clients entrust us with specific mandates, and it is our responsibility to remain invested within those mandates at all times.