“The underlying principles of sound investment should not alter from decade to decade, but the application of these principles must be adapted to significant changes in the financial mechanisms and climate.”
Investing must have a purpose, a quantifiable goal to be achieved, or it is nothing but speculation. The decision to actively save instead of consume should be based on a well reasoned and articulated plan.
To that end, Tilden Capital Management’s investment style is guided by two very distinct schools of thought. The first is value investing as developed and taught at Columbia University by Benjamin Graham and David Dodd, and used by so many distinguished investment professionals over the years. The second is Post-Modern Portfolio Theory (PMPT) first developed at the Pension Research Institute in the early 1980s by Dr. Hal Forsey and Dr. Frank Sortino.
Value Investing focuses on the selection of securities that are mispriced relative to their underlying value. More recent texts focus on the valuing firms first on its assets, then earnings power value, and then on profitable growth.
Post Modern Portfolio Theory focuses on portfolio allocation to achieve a target goal rate of return. The risk parameter often used in this process is downside deviation instead of standard deviation.
Coupled with the above two investment theories, the CFA charter and its lessons form the structure around TCM’s investment style. Investments are made based on a client's return objective, risk profile, timeline for objective, tax consequences, liquidity needs, legal ramifications, and unique circumstances.
For a detailed view of TCM's investment process please click here.