A VALUE INVESTING FIRM

Investment Strategies of Fortress Capital

Fortress Capital's primary investing strategy involves investing in public equity securities, commonly referred to as ‘stocks’. The firm normally invests in equity securities of U.S. and non-U.S. based companies, with the balance of funds shifting between the two as opportunity dictates. 

Fortress Capital's guiding principles in selection of securities for purchase are as follows:

• That stocks represent ownership pieces of real businesses, and those businesses have value

• Value is determined based on analytical assessments; performed by the firm's Managing Principal, of a given business’s financial statements and condition, competitive market position, current and future company prospects, and quality of management in order to arrive at a fundamental, intrinsic value for that business

• Purchases of stocks are made when the firm believes to be receiving more in value than the price being paid, and ideally, substantially more

• No attempts will be made to predict stock market fluctuations, general economic conditions, or interest rates in deciding if a security is worthy of investment

• As with any financial investment, results cannot be guaranteed, and investment outcomes always carry the risk of permanent capital loss

Portfolio Management

Fortress Capital's Managing Principal assumes sole responsibility and authority for selection, purchase, and sale of securities for client funds managed by the firm.

The investment approach of the firm is long-term, with high concentration and minimal portfolio turnover.

This approach could be classified as a ‘non-diversified’ investment approach, and rightly so. But diversification can also lead to what legendary investor Peter Lynch referred to as ‘diwersification’. Where an investor dilutes their potential investment results by spreading their investment funds across too many varied positions, instead of concentrating capital on their highest conviction ideas. 

Performance Measurement

Client portfolio performance is measured against the S&P 500 index on an on-going, annual basis.

Although performance is reported annually, it is the view of Fortress Capital that performance over a 3-year period is the absolute minimum amount of time needed to evaluate the results of any equity based investment strategy, with a time horizon of 5-years or more preferred. 

Your Managing Principal considers any year in which the performance of client portfolios exceed that of the S&P 500 to be a good year, including years in which overall market returns are negative. (A scenario bound to exist over the course of an investment lifetime.)

Transaction Types

The Managing Principal, acting as your investment adviser, will always look to minimize risk for all clients, defined as any permanent loss of capital. 

This is accomplished in no small part by sticking strictly to purchases and sales of those securities which the firm's Managing Principal believes are understood well enough to make an informed, reasoned investment decision, without employing the use of margin, debt, or leverage of any kind. 

Finally, your adviser does not engage in any short selling, although, from time to time, will engage in the purchase of put and call options or the selling of covered call options where, in either case, risks to the downside have a finite limit.