Troll the Ocean – Initially ideas come from reading an article, a current investment, online resources, computer programs, T.V., newspapers, friends, wife, kids, etc… The point is we try and look under every rock to identify a good idea.

 

Find a Spot you Like – If an idea "jumps onto your radar screen" you review financial valuations and ratios, make sure you understand the business/company, check the competitive landscape, and see if its interesting.

 

Take a Deep Dive – Once an idea successfully passes through steps 1 and 2, we “go down the rabbit hole" (i.e. do considerable research and financial analysis), making sure we like management, their competitive position, and ensure it is both undervalued and presents a considerable margin of safety.

 

Gather your Thoughts–  After completing the first 3 steps, we further gather our thoughts and the results of the research and analysis. It shouldn't take much to explain an idea. If it does, it's probably too complicated an investment (we like 1 foot hurdles).

 

To Invest or Not to Invest, That is the Question -With thesis in hand, we see if the company we just analyzed is superior to what we currently have. If it's superior to what is currently in our portfolio, we invest. If not, we simply pass.

 

Watch the Investments– Follow each company to make sure it’s doing what we expect. Continually evaluate to see if we need to make a change or keep everything the same.