At Früh & Partners, we see business relationships with our clients like partnerships and invest their entrusted capital as thoughtful as our own.
We pursue a value-based long-term oriented strategy with the aim to solely invest in outstanding companies. We want to not only preserve the entrusted capital in value, but also to increase it with above-average returns over the long term.
Our investment philosophy has been strongly influenced by Warren Buffett, his partner Charlie Munger, Peter Lynch and others, though less known, yet extremely successful investors following a similar strategy.
We consider positive and negative valuation swings in the public stock market as a normal and perpetual condition. We believe the reasons are deeply rooted in human nature and are very unlikely to change. With stock investments, one must expect price fluctuations around the real values of publicly listed companies over the short term.
At Früh & Partners, price volatility in the public stock market means opportunity. Fluctuations in valuations repeatedly enable us to acquire shares at attractive valuations and to hold them until the causes of the undervaluation fade away again. The vast majority of investors has great difficulty doing so. It can be seen in usually short holding periods and pro-cyclical buying and selling behaviour. This is a key reason for suboptimal investment performance. We stand to act differently
Some years ago Warren Buffett said: "The stock market is a system that transfers money from the active to the patient." We share his opinion and pay heed to this valuable message in our philosophy. When we consider a new investment opportunity, we normally target a time horizon of five years or longer. Our analysis focuses on the long-term potential of a company and not the short term.
Since most market participants focus on short term events, those who focus on long-term fundamentals are likely to find opportunities that provide superior long-term returns.
Our selection criteria for companies are rigorous. We want to put capital only in the best companies - companies that have the potential to generate above average returns for a long period of time. As a result, we spend a great amount of time researching, analysing and selecting companies. We also limit ourselves to only a manageable number of companies and view this as another crucial success factor.
Underpinned by our thoughtful selection of a limited number of highly attractive businesses, we pursue above average long-term returns with below average market risk.