Why We’re Different

Simplicity

The financial industry makes investing unnecessarily complex to convince you they are smarter than everyone else and justify their high fees. They claim to use sophisticated analysis to time the short term movements of the markets. This is nothing more than marketing. The financial industry uses complexity to hide the fact that they are just following the herd, doing what everyone else is doing and investing in the same things. How did this work out in the Housing Crisis or the Dot-Com Bubble?

De Novo Capital strives to remove complexity and keep things simple. Stocks are not just pieces of paper, but ownership shares in real businesses. De Novo Capital only invests when we can understand a company, make an independent assessment about its value, and buy when the market is selling at a discount. De Novo Capital’s strategy emphasizes patience, discipline and common sense over complexity.

Transparency

Many in the financial industry hide their fees, including hefty commissions attached to investment products like life insurance, annuities, or mutual funds laden with sales charges. They don’t want you to understand what you own, what you are paying them, or your real returns.

De Novo Capital doesn’t try to sell you anything. The portfolio manager’s advice is not biased by commissions, and the firm doesn’t hide its fees. You invest the same way we do. At De Novo Capital, the portfolio manager invests his own portfolio alongside the clients, and the manager’s portfolio rises and falls with the clients’ portfolios.

The portfolio manager communicates his ideas and strategy directly with clients. De Novo Capital wants its clients to understand what we own and why we own it, allowing clients to stick with the strategy for the long term.

Independence

“How do you beat Bobby Fischer? You play him at any game but chess.” – Warren Buffett

Many people believe the markets are rigged. They are, if you play the same game as the rest of Wall Street, focusing on short term market swings and buying the same stocks as everyone else.

To succeed in the market, you have to play a different game. At De Novo Capital, we believe the key to outperformance is to invest independently:

• Invest for the long term, not quarter to quarter.
• Avoid the hot stocks. Look at what is out of favor or ignored.
• Be disciplined about price.
• Concentrate in the best ideas.
• Be willing to admit when we are wrong and change course quickly.
• Use the market swings to our advantage.
• Above all, think independently.