INVESTMENT PHILOSOPHY
 

Intensive, Organic Research. The word lapides is the plural form of the Latin word for "stone", and our philosophy is just that: to leave no stone unturned in our quest for attractive investments. Intensive, organic research lies at the very heart of what we do.

However, research has no meaning without conviction and context. To have conviction, we believe there must be focus, originality in thought, and a willingness to take an unpopular stand.

Focused Concentration. Our research focuses on industries we know, where our cumulative experience can have a meaningful impact on our clients' portfolios. Further, our portfolios consist of a limited number of holdings with significant positions so when our research pays off, the impact on the portfolio is substantial.

Original Thinking. Three decades of researching companies around the globe gives us the advantage of first-hand knowledge of a broad range of industries. Our unique perspective is both a philosophy (something we believe we must have to be successful) and a product of our hands-on research. This is where our extensive knowledge as generalists helps us build the mosaic for each of our investments that we believe gives us a competitive advantage.

Contrarian Approach. Being contrarian means being willing to take the unpopular stand and embrace a view others do not share. Our proprietary research allows us to have sufficient conviction in our thesis to buy our shares when others are giving up. Simply put, if we know a company thoroughly, we can take advantage of any temporary dislocations if it disappoints, becomes ignored or is misunderstood.

Our intensive research, perspective and our focused, contrarian thinking are important elements in achieving superior returns. Before we can compound capital, we must first be conscious of preserving it. To do this, we have a philosophy of buying evolving situations where the value is under-appreciated or misunderstood. Dispassionate objectivity means letting the facts and independent, critical thinking be our guides.

Capital Preservation. The best way to achieve superior results is to minimize losses in the first place. We believe in buying when expectations are low so that the risks of further declines in stock prices are diminished.

Buy As Value, Sell As Growth. It is always best when buying something of value to purchase it when it is on sale. Our philosophy is to seize opportunities by paying significantly less than the underlying business is ultimately worth. Our intent is to sell our investment to less price-sensitive investors as our original thesis plays out with rising earnings momentum, justifying valuation multiple expansion.

Evolving Value. Evolving value is meaningful change - the transformation of a company into something materially better than it was. We find the best returns come from companies that can succeed in this transformation. Our experience enables us to discover outstanding candidates and, hopefully, profit from our involvement.

Dispassionate Objectivity. We are objective - nothing clouds our long-term perspective. Our approach allows us to make calculated assessments based solely on the facts, our existing knowledge and our extensive research.

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