We adhere to the time-tested notion that wealth is best created and preserved through diligent long-term participation in the equity markets. At Jas. Smith Advisors, we are not market timers, but investors, seeking the best risk-adjusted investments for our clients’ capital over their investment horizon. Unlike many managers, we do not cling to the belief that growth and value are mutually exclusive. Quite the contrary, our experience suggests investments in companies that exhibit strong relative earnings growth, purchased at discounts to fair valuation, generate the highest risk returns.

We begin our approach by seeking the most favorable areas for investment that we believe will outperform the overall economy. Next, we seek to identify growth stocks that, we believe, are selling for reasonable prices. We search for excellent businesses, both large and small, with strong management teams and a proven record of creating shareholder value. We are attracted to companies that have developed a competitive advantage. We want to own businesses that judiciously deploy capital to earn a high return to equity and that maintain strong balance sheets.

Great long-term investments are characterized by companies with large profits and abundant opportunities in which to invest this capital at high returns. However, if available cash exceeds opportunities, management has the responsibility to return this capital to shareholders through high dividends or stock repurchase programs, which we also find attractive. Efficient use of capital is a hallmark of a great management team and a great company, and most often - a great investment.

While there is an abundance of ideas to investigate, few will have the attributes that we require. We recognize that we cannot buy a superior company at an inflated price and have a superior investment; the price paid for the company is an important aspect of the investment process. By purchasing companies at a discount to our estimate of fair value, we simultaneously increase our return potential and reduce our risk of permanent capital impairment. We have found that buying superior companies at reasonable prices generates strong long-term results.