Investing Philosophy About Value InvestingGratio invests your money based on the principals of value investing. While other strategies have come and gone, value investing has proven the standard against which all other strategies are measured. Great names from Graham and Dodd to Peter Lynch, Bill Miller, and Warren Buffet have held steadfast to the principles of value investing with great success. The reason is simple – value investing has produced. Value investing relies on the fact that the stock market doesn’t always price assets correctly. Value investors look for assets that are selling for substantially less than their intrinsic value based on the belief that over time the market will correctly price those assets. It’s about figuring out what a company is worth and purchasing it for substantially less. What’s the catch? If it is possible to do this, why isn’t everyone doing it? First, it’s not always easy to know that a business is a good value — that a business is really worth a proverbial dollar when it’s selling at 50 cents. Second, value investing works over the long-term. Investors who aren't willing to stick things out need to look elsewhere. The good news is that you, like the most successful and rewarded investors in history, can invest with a long-term focus. Our Approach
At Gratio, we combine elements of both quantitative and qualitative research into our investment style. This dual approach lets us capitalize on time-tested numbers-based strategies as well as on harder to quantify opportunistic investments. Our quantitative approach applies metrics and formulas to select a preliminary grouping of potentially profitable investment opportunities. The metrics aim to assess both the fundamental economic characteristics of a given business and the price at which we may purchase that business. When we find a business with a superior economic profile, we are willing to pay a fair price to purchase such securities. When the nature of the business model is subject to too much competition or has limited growth potential then we will demand a far greater discount to what we consider a fair value price. In short, we look to purchase good businesses at attractive prices. Typically, we employ these metrics to narrow our equity search dramatically; at which time our portfolio manager performs additional analysis to determine which opportunities should be added to the portfolio. Additionally, the Fund portfolio focuses on investments chosen by Gratio Capital separate from its quantitative screens. These are opportunities that our portfolio manager feels are attractive due to special situations, opportunistic timing, or other criteria that may not fall under our metrics-based approach. A fast growing company on the cusp of profitability, a hidden balance sheet asset, or a corporate governance change caused by an activist investor would be a few examples of such investments. In total these approaches combine to form a relatively focused portfolio of domestic equities that tend to fall in the small to mid capitalization range. What We Won't Invest In
Gratio does not invest in companies whose primary business is tobacco, alcohol, adult entertainment, or firearms. | 
