We will continue to seize opportunities where short-term noise allows us to identify and purchase what we think are great businesses with bright futures.
We believe aligning with the most competitively advantaged businesses for the long term, through crises, is the best way to not only generate positive returns but also to preserve capital during tough times.
We continue to have conviction in the strength and durability of the businesses we own and believe that most, if not all of them, will emerge from this period stronger.
Quality companies, in our view, are well capitalized, profitable, and generate better-than-average returns on capital. We think owning a Portfolio of such businesses allows us to ride out the occasional storm.
We want to own businesses that self-fund and have the flexibility to make thoughtful long-term investments that could make the enterprise stronger.
We focus solely on profitable companies that we believe have durable competitive advantages, self-funding business models, positive cash flow, attractive balance sheets, and favorable liquidity positions.
We prefer to have an allocation to “safety” businesses that we believe will be significantly less impacted during periods of economic stress. These companies often provide ballast during market drawdowns.
Since inception, and for the more than 30 years that we have been executing our investment discipline, we have consistently captured less of the market’s downside during difficult times.
Our active approach to international markets employs Polen Capital’s time-tested guardrails, which steer us clear of investments in highly cyclical corners of the market, like banking and energy.
In the fourth quarter, balance sheets were sound and our portfolio metrics compared favorably to the Russell 2000 Growth universe.