Philosophy

Punch believes that investing in small companies is the best way to generate superior long term investment returns. The core tenets of our philosophy are:

  • Returns on Capital are Greatest Where Capital is Most Scarce.  We believe that the best opportunities exist where expectations are the lowest.  High expectations equals high risk.
  • The Importance of Risk Control. Our approach demands a margin of safety before we invest.  We believe that preservation of capital is the essential component of durable long term investment success.  This is often a direct function of a manager’s ability to avoid investments where optimism is high and valuations are demanding.
  • Research Matters. There are no shortcuts to good small cap stock-picking.  Lack of attention and analyst coverage creates persistent pricing inefficiencies.  We seek to build an information edge by performing thorough fundamental research.
  • Extreme Investor Behavior Creates Value.  We are keen observers of investor sentiment and are constantly on the lookout for behavior that is short-sighted, emotionally-driven or uninformed.  When prices move to irrational extremes, opportunities develop for patient long term investors.
  • Value Then Growth.  We combine the discipline of a value investor with the imagination of a growth investor.  This approach controls risk while capturing the significant growth potential of undiscovered small companies.