McElvaine Investment Management’s phiolosophy

I came across McElvaine Investment Management via another blog. Tim McElvaine is the founder and President of McElvaine Investment Management Ltd. Tim developed his value-oriented philosophy during his 12-year career with Peter Cundill & Associates Ltd. Peter Cundill, I have read is a renowned investor in Canada.

I liked the simplicity of the investment philosophy which is summarized as below

IN A NUTSHELL, our investment philosophy is “to make all the money on the purchase.” As an investor, we believe one of the few things we can control is the price we are willing to pay. Therefore, when we are selecting investments, we focus on what we are getting and at what price we are prepared to act. Our intention is to invest only where the difference between the value of the investment and the price we pay gives us a margin of safety.
The factors we consider in assessing investments include:

1. The difference between the “intrinsic value” and the market price of the investment
2. The business risks associated with the investment
3. Incentives that align management’s and shareholders’ interests.

They have an acronym for what they look for in an investment. It ABBA.

A – Accident
B – Bird in hand
B – Brick house
A – Avoid ( or atleast understand) Lola / Align interests

Read about it here. Its worth printing and keeping around.

An excellent interview with Tim is found here

A most recent video lecture in 2011 can be seen here

About Adib Motiwala

Portfolio Manager at Motiwala Capital LLC
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