Our Approach: Public Equities

Our Approach

Pacifica’s goal is to build long-term wealth for clients by investing in public companies that have strong prospects for the foreseeable future. Our proprietary investment process focuses on acquiring stock in those businesses, as part of a concentrated investment portfolio, at prices below our estimate of their intrinsic value. Our approach reflects patience and discipline – and they are the foundation of PCI’s long-run success.

No part of our investment management is outsourced; we analyze and select each company, and then opportunistically include each one in a portfolio that has the best long-term potential. We seek to minimize risk by knowing more about the companies we own. Pacifica gains no comfort in “diversifying” holdings. Instead, we concentrate holdings in our favorite companies rather than spread them over ones that aren’t. The investable assets of the firm’s principals are concentrated in the same basic portfolio of companies as our clients (depending upon the opportunities available at the time).

Buy & Hold Investment Philosophy

Pacifica’s first rule of investing is “no permanent loss of capital,” and our investment approach is designed to avoid that occurrence over the long-term. The key to our success is finding outstanding businesses that can be bought at attractive prices and holding them over the long-term – and the longer the better. Our “buy and hold” philosophy also creates tax efficiencies for most investors.

Pacifica often holds substantial cash positions for varying periods of time while we await opportunities to buy interest in great companies when the market makes them available at discounted prices. Until compelling investment opportunities present themselves, your money will remain in interest or dividend-bearing instruments.

Focused on Quality Companies

Pacifica focuses on finding quality businesses that we understand well.

We define these as having:

  • favorable long-term prospects
  • sustainable competitive advantages, and
  • capable and shareholder-oriented management teams.

Pacifica’s investments are most often in companies that have strong brands, leading market positions, honest and capable management, high returns on invested capital, and sustainable competitive advantages. We concentrate on select industries that we believe we can understand and seek to minimize risk by owning fewer businesses we know more about.

Value Investing

We strive to invest in the strongest businesses when the market makes them available at prices below our estimate of their intrinsic value. Since that condition doesn’t often occur, the PCI approach also includes opportunistic acquisitions of quality companies when there is a solvable concern within a company, trouble in its sector, or fear is prevalent in the broader market.

The key to PCI’s success is finding outstanding businesses that can be bought at attractive prices and holding them over long periods of time. We wait patiently until opportunities emerge and buy when we have confidence in the long-term performance of the business. If those criteria are not met, our philosophy dictates that we hold cash until we find those opportunities.

Long-Term Results

The key to our long-term success is that we have found and invested in strong businesses bought at attractive prices — and have typically held them for long periods of time. Our goal is to beat the market over time — not to beat it every time. Pacifica’s long-term results, as illustrated on the Results page of our website, show how Pacifica has outperformed the market and has provided significant gains to its longest-term clients.