One Team One Philosophy One Process

The Foundation of our Thinking

High quality, low risk has been the hallmark of Cooke & Bieler’s investment approach for more than six decades.

We believe that 1.) Fundamentals drive stocks prices, 2.) Capital preservation improves returns and 3.) Culture shapes investment decisions.

Accordingly, we seek to buy businesses that can compound value over time and to minimize risk through diligent research and a rigorous valuation discipline. Our culture and team structure have permitted us to execute successfully on these common sense objectives for decades. The result is a high quality, low risk portfolio with a consistent pattern of performance.

Fundamentals drive stock prices.

Over an extended time horizon, investors’ returns are determined by the underlying economic returns of the businesses they own. Our long-term investment horizon and low portfolio turnover are direct corollaries of this core belief.

In the short-run, though, stock prices are volatile; more volatile than underlying business economics. The market’s short-term focus creates opportunities for patient investors, allowing us to buy good companies at prices far below intrinsic value.

Capital preservation improves returns

It is axiomatic, but often overlooked, that avoiding losses is as important as generating gains. So even the performance of the inherently advantaged long-term investor can be enhanced with the help of a few simple guardrails.

    We avoid permanent capital impairment by placing equal emphasis on three key considerations:

  • Economics of a business: We invest in high quality businesses - companies with attractive and sustainable returns on capital, durable competitive advantages, operating in attractive industry structures, and with skilled and shareholder-friendly managements.
  • Balance sheet and capital structure: An appropriate balance sheet helps ensure that the business will not be financially stressed in difficult economic environments and that equity owners’ interests are well protected.
  • Price: In general, we seek 30-40% appreciation potential at the time of purchase.

Culture shapes investment decisions

In the wrong environment, even smart people will make poor decisions. The right environment facilitates both individual decision making and collaboration.

We entrust stock selection to the most informed person, the Career Analyst, allowing the individual who has done the work and who best understands the fundamentals of a business to make the investment decision. At the same time, we believe individuals who are part of and have the support of a small and highly-engaged team make better decisions than individuals operating in a vacuum.

We carefully tend to our culture, manage incentives and, most crucially, select our team to balance expertise, individual initiative and collaboration.

Experience. Stability. Continuity.

Capital Preservation.

We focus exclusively on the things that matter for investment success:  Selecting stocks, building portfolios, and managing our team with the single goal of outstanding, long-term investment results.