Investors ■ Private Clients ■ Pattern of Results
Cooke & Bieler has delivered on a promise made to generations of clients to grow and protect their purchasing power. Just as important, the firm has done so according to a predictable pattern of results, and while limiting risk. We carefully manage downside risk to preserve capital. The key to this has been the High Quality, Low Risk style inherent in our investment philosophy.
Downside Risk Management – Avoiding serious downdrafts is critical to long-term investment success. Our fundamental and proprietary research attempts to uncover issues at companies that could lead to serious stock price corrections. Our companies’ competitive advantages, diverse sources of cash flow and strong balance sheets tend to mitigate against such drops and to allow our companies time to work through unforeseen problems. Nevertheless, we impose concentration guidelines at the sector (35%), industry (20%) and security (5%) levels.
Variation - We also recognize there are times when the companies we follow will be out of favor, sometimes for extended periods. We are not “closet indexers,” and our clients understand that their portfolios will sometimes diverge from the broadly-followed indexes.
Performance
- Positive equity returns in every year except three (32 out of 35 years) since 1974
- Lower standard deviation and higher Sharpe ratio than the S&P
For taxable accounts, portfolio managers invest in a tax-efficient manner, avoiding short-term capital gains, managing turnover, and using losses to offset gains. Given that every client faces a different tax situation, we do not expect our equity portfolios to look identical. Rather, each portfolio is customized to the client's particular situation. Therefore, taxable accounts may differ in holdings, characteristics, performance returns, and fee schedules.
