Business quality
Can the economics be understood, defended, and repeated?
Investment principles
Think like an owner. Pay attention to price.
Harbor's work is grounded in a simple idea: a share represents an interest in a business. The quality of that business, the durability of its economics, and the price paid all matter.
The ownership perspective
Ideas that keep the analysis anchored in the business.
“Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily-understandable business.”
Warren Buffett 1996 letter ↗
“We aim to be long-term, buy-and-hold investors. We seek to own only stocks that will compound in value over the years.”
Terry Smith Fundsmith source ↗
“Capital allocation is the link between business value and shareholder value.”
Pat Dorsey Presentation ↗
Applied, not decorative
Principles become questions.
Reinvestment
Can the company deploy additional capital at attractive incremental returns?
Capital allocation
Does management treat every retained dollar as owner capital?
Valuation
Does the price allow for uncertainty and offer a rational balance of risk and value?
“Investment is most intelligent when it is most businesslike.”Benjamin Graham
A principle is useful only when it improves the decision.
Harbor's research tests these ideas against primary evidence, financial statements, valuation, and downside risk.
Review the research method