Overview

Ever since our founding and throughout the subsequent era of booms and busts, our mission has remained the same: to protect the purchasing power of our capital in real terms and to participate in honest and enduring economic activities that, over the long term, increase our capital and lend themselves to genuine capital accumulation and wealth creation.

We hold a collection of investments in companies domiciled in Europe, Asia, and North America with a worldwide economic footprint. These represent claims on natural monopolies and economic niches with high barriers to entry, pricing power, and scarce and enduring economic substance and are run by like-minded managers and owners. We seek out businesses that endure and avoid becoming more fragile, regardless of their importance to others or weight in any index. No index exists that properly reflects the Shepherd investment strategy, asset mix, or the presence of reserves as a foundational aspect of an investment practice. For this reason, neither investment decisions nor returns will be compared against a market index or the practices of others.

In pursuing our mission, we are guided by a set of foundational operating principles regarding the means we employ and their significance. Furthermore, we do not employ leverage or engage in derivative transactions, short-selling, or currency hedging.

The beauty of value investing is the logical simplicity of its two key principles: determine an investment’s worth (intrinsic value) and avoid losing money (margin of safety). Introduced by Benjamin Graham in 1934, these straightforward concepts remain relevant today and serve as the cornerstones of our investment philosophy as we shepherd our family’s capital for the benefit of future generations.

We believe that a successful partnership demands a profound sense of personal compatibility. This implies a clear understanding of goals and objectives and a mutual appreciation for common and permanent values. Our capital represents the savings and lifetime work of our investment partners. We have the utmost respect for its irreplaceability. Capital is scarce. Accumulating savings requires time, effort, and sacrifice. Keeping it is quite difficult. All our decisions are rooted in avoiding a permanent impairment to our capital. This is central to our purpose.

We believe that capital survival is a prerequisite to capital growth, and the choice between the two is easy. We do nothing complicated or formulaic. We invest in businesses and people we understand and avoid those we do not, no matter how compelling they may appear to be. We seek to hold a diverse collection of assets but do not rely on diversification to compensate for risks we do not understand.

We operate in the financial industry, but we are not of it. We reject its principles, practices, and methods. We are owners rather than investors and deploy our capital alongside owners. We have no predetermined investment horizon or exit strategies and only seek to participate in the long-term compounding of earnings.

Purpose & Objective

Investment Principles

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