Investment Philosophy

Our investment philosophy is largely guided by the principles of behavioral finance. Most modern economic theory assumes that individuals act rationally, whereas behavioral finance suggests they do not. Investors who are able to identify these moments of irrational behavior have the opportunity to profit from them. We believe, when the majority of participants in the market are acting in a similar fashion, their behavior is likely to be proven wrong at some point in the future. Accordingly, the behavior of market participants influences the level of aggressiveness for our strategies at any given point in time.

Contrarian: We believe that returns on capital are greatest where capital is most scarce.  We actively seek out areas of the market that other investors avoid, ignore or misunderstand.

Value Oriented: We seek out companies which we believe are value-priced and have the potential to be viewed by other investors as growth enterprises based on existing, yet unrecognized or overlooked, characteristics.

Risk Averse: We believe that avoiding losses is the first step in generating gains.  We demand a meaningful margin of safety in all of our investments.

Original Research: We believe that there are no short cuts to good stock picking.  We are not afraid of doing the hard work of finding and researching the smallest public companies.

Long-term Investors: We want to be long-term owners of high-quality, niche companies as they transition from being under-recognized and under-valued to well-recognized and over-valued.

"The essence of investment management is the management of risks, not the management of returns."

- Benjamin Graham

PUNCH INCOME STRATEGY

Benchmark: Blend
This strategy is oriented towards generating current income as well as long term capital appreciation through investing in a variety of yield producing vehicles.

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PUNCH LARGE CAP STRATEGY

Benchmark: S&P 500
This strategy seeks to gain exposure to the broad domestic market through core holdings in equity closed-end funds and targeted investments in individual companies.

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PUNCH SMALL CAP STRATEGY

Benchmark: Russell 2000 Index
This strategy seeks to outperform over the long-term by uncovering small companies which trade a value prices and have the potential to become much larger enterprises.

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PUNCH MICRO CAP STRATEGY

Benchmark: Russell Micro Cap Index
Operating in the smallest segment of the investable universe, this strategy seeks to outperform by investing in value-priced companies with strong fundamentals and growth opportunities.

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