Core Growth Methodology
Investment Management requires a range of skills for success.
Our results are due to a thoughtful blend of art, mathematics,
and psychology. With many decades of combined experience
we have the wisdom to understand the many risks that lie
ahead. Our investment team has experienced bull, bear, and
bubble markets -- and over time we have managed to keep
our investors on course.
Art: Qualitative Concerns
Many portfolio managers begin their equity selection process
with a quantitative screen, which sifts through thousands
of companies highlighting those that meet a predetermined
set of criteria. In contrast, Albion begins with an exploration
of forward-looking ideas. We gather facts that reflect macroeconomic
trends, country demographics, political and social tendencies,
possible paradigm shifts, world events and other macro data.
After combing through these important snippets of information,
we determine which sectors are most promising. Then, our
portfolio managers concentrate on finding future growth
leaders from these attractive industries.
Looking to the future first and history second goes a long
way toward reducing risk while enhancing returns for our
clients' assets.
Albion focuses on the big picture, which allows us to identify
economic issues, demographic trends, and direction of global
change. We look for possibilities to profit from these trends
and seek companies that have the ability to capture and
exploit these opportunities. At the same time Albion's advisors
have the wisdom to understand the risk inherent in any opportunity
and the experience to know that no opportunity lasts forever.
Art is the long-term view of the selection process that
allows companies to prosper.
Mathematics: Quantitative Factors
Once the opportunity is defined, we switch our focus to
mathematical elements. Albion examines the underlying fundamentals
of potential investments: financial stability, strong management,
and an absence of hidden bombs. By talking to suppliers,
customers and competitors of the firm, we make sure the
company is fundamentally sound and has the ability to execute.
The mathematical factors are the mid-term view of the strengths
the company has to execute the vision.
Psychology: Emotional Issues
Investor psychology is the final step in Albion's approach
to investment. We start by asking, "When is the right time
to buy?" In today's market, many factors influence investor
psychology. Technical analysis helps us quantify the impact
of investor psychology on the market which allows us determine
when it is time to buy or sell a position. Although we are
not technical investors, we take into account as many factors
as we can to make informed decisions.
Perhaps the most important decision to be made on behalf
of our clients is the overall allocation of their investment
assets. We are constantly assessing the relative risks and
return potential of asset classes and adjusting the balance
as appropriate. We avoid dogmatic rules, including the conventional
wisdom that growth investors should be 100% invested in
stocks 100% of the time. Our clients value us for our experience
and judgment in determining not only what, but how much
of a given investment or class of investments to own.
Unlike many investment management firms, the foundation
of our analysis is an effort to see where companies are
going, not a screening process to determine where they have
been.
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