Our Personal Philosophy

WE ARE OPTIMISTS:

“ Human flight in a machine might be evolved by the combined and continuous efforts of mathematicians in one million years.”
  — from an article in The New York Times, October 9, 1903
 
 “We started assembly today.”
 —  from the diary of Orville Wright, October 9, 1903 
 
 
Our overriding objective at TCM is excellence, or more precisely, continuous improvement. We want to have a culture of excellence that results in a superb and constantly improving company.
We believe the pursuit of excellence brings happiness. This can take many forms – in managing money, in raising children, in sports. We believe that another ingredient for success is bringing together a group of people who want to be on a shared mission of excellence. This involves the awareness that  we are a team and our fates are connected. We need to have people around us who share this philosophy.  
 

Change is inevitable and easy. Improvement is far more difficult. Identifying problems and mistakes is an essential ingredient in the improvement process. The biggest obstacle to improvement is that people tend to tie their egos to their mistakes. They are not open to the reality that a mistake can become a powerful ally.

Problems and mistakes should be expected and should be viewed as constructive, not destructive. Mistakes can be good things – if we learn from them and improve. What matters most is how people deal with them. If they objectively diagnose mistakes and establish ways of not repeating them, that’s great. If they avoid facing up to them and don’t alter what they are doing, this is unacceptable.

This is particularly applicable to managing money, where it is easy for human emotions to become the generators of decisions. But it is difficult to admit and analyze mistakes when the ego runs the show. It’s essential that one has a healthy respect for the changing economic climate. For average investors, this respect is often trumped by fear and greed.

We believe that for an investment portfolio to be successful, every position must work well. If one area fails, the portfolio breaks down. As the saying goes, we are as strong as our weakest link. This is why we recognize poor-performing investments and get rid of them. We believe this is one of the most difficult responsibilities of a money manager. This may be ill perceived to conventional buy-and-hold investors, but we think of it the way Miles Davis thought of jazz – he perfected the music by identifying the notes he could take out. The challenge in any business (or life, for that matter) is to identify and remove what gets in the way of manifesting a wide and creative vision, to remove obstacles to success and distribute resources where they are needed.

As portfolio managers we hunt for absolute returns in any market in the world, using any asset class or style to capture return. If you are thin-skinned, not open to the risks or opportunities in world markets, or you don’t like delegating investment expertise, you should be somewhere else.

The only reason to become a client is because you believe that this philosophy works and that it is being followed here. While everything else will change, this philosophy will remain the same and describes how we will approach change. With this philosophy, we will all do well financially.

 


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