Stephen Groff's blog

Why we take the time to visit companies

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Ian and I recently returned from a five day, six city trip across three European countries. It was a good opportunity to catch up with management teams and to see firsthand the facilities of some existing and prospective portfolio companies.

We are sometimes asked, “What value do you get from visiting companies on their home turf instead of at conferences or through conference calls?” The answer is that we view the act of going to meet them very worthwhile for a number of reasons:

What fundamental analysis means (and why we are bad golfers)

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We often get asked what it means to do fundamental or bottom-up analysis. In a nutshell, it is a lot of hard work, time and travel in the pursuit of finding attractive risk/reward opportunities around the world for the benefit of our fundholders. It’s because of this level of effort and diligence that our investors entrust active management and specifically Cambridge with their hard earned savings.

Low volatility ... the new momentum

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In Brandon’s earlier blog post, “Is the market expensive?” he touched on areas of the market that appear over / undervalued, but also on investors’ hunt for “low volatility” and “defensive” investments that have driven many of them to prices that now make them risky. In this post, we’ll touch on how this is happening. By better understanding the mechanism that is driving this, one is in a better position to manage and avoid unknowingly taking that risk.

A warm welcome to the newest member of our Cambridge team

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The purpose of the Cambridge blog has been to keep our partners across the country informed on what we're doing and thinking. While the focus has mostly been around stocks, the macroeconomic environment and portfolio positioning, it is also important to highlight our (growing) team and the hugely important role each member plays to the success of the firm. While many of our clients have not met our analysts, their knowledge of their sectors and interest in stocks would impress you.

The opposite of the “momentum trade”: where we see great opportunities

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In Brandon’s latest blog post, he highlighted the strength of the momentum trade which has propelled a narrowing section of the market to increasingly high prices. While the momentum pendulum can often swing farther and longer than many (including ourselves) would expect we are willing to risk missing out on potential gains when we are not being adequately compensated to take the risk.

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