Equity Investment Corporation

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OVERVIEW | PROCESS | PORTFOLIOS | TAX EFFICIENCY

Investment Process

  • Valuation Models and Price Discipline
    In contrast to valuation models relying on simple measures like P/E, our models focus on the value of being a long-term owner of a business, so they capture the value of long-term growth.

  • Value Trap Avoidance Tools
    Businesses that don’t grow tend to be poor long-term investments. We use a comprehensive set of internally-developed tools to eliminate companies whose characteristics suggest they are structurally or managerially unsound, and therefore unlikely to grow.

  • Accounting and Earnings Quality Due Diligence
    We evaluate the quality of the accounting and management integrity by reading 10-Ks, 10-Qs and other available information.

  • Diversification
    We diversify portfolios across industry groups, with initial position sizes of 2% to 4%.

  • Portfolio Construction
    The average number of positions in a portfolio is between 35 and 40. A position is trimmed if it reaches 6% (due to relative price appreciation).