- How can I benefit by working with
The Ridgewood Group ?
- What kind of investing do you practice ?
- What kind of clients/partners are you looking for ?
- Is there any evidence that value investing
works ?
- How do I invest with The Ridgewood Group ?
- How do I deposit additional funds into my
account ?
- How can I get more information ?
We formed the firm with one
purpose, to deliver outstanding long-term investment performance for our
clients/partners by employing a thoughtful and proven approach that tries to
minimize risk. Like other successful investors, we define risk as risk of
permanent capital loss (as opposed to temporary quoted price fluctuations).
At The Ridgewood Group, we
apply time tested principles and techniques. We believe that our approach
and our personal commitment is rare in an age when many money managers chase
relative performance, have a number of unproductive constraints, or are
sidetracked by short-term fads. Based on our principles, a lot of work,
and the discipline to avoid the temptation to follow the herd, we try to pursue
and deliver outstanding investment results to our partners and ourselves.
Our goal for you and our other
valued clients is
the same as our goal for our own money - to achieve an excellent compounding of
capital over long periods of time without taking undue risks of permanent
capital losses. While we cannot guarantee performance, we can guarantee
that we do eat our own home cooking. We believe it is important for our
clients to know that nearly the entire net worth of our president and founder, his
immediate family, and many of his friends and relations who have chosen to
become clients, are also managed by The
Ridgewood Group or one of its officers or affiliates. Most of these funds
are invested in the same manner and side by side with the funds we manage for our
other clients like you.
We are devotees of a form of investing called value investing. The
essential ideas of value investing are easy to grasp: First, one should be businesslike when it
comes to making intelligent investment decisions. Second, price matters
and has an important impact on both the risk of the investment as well as the expected
returns.
Businesslike investing means that we approach each investment
opportunity with analytical rigor. We require a carefully analysis to determine
the attractiveness and quality of the business. We do this from a
bottoms-up or firm by firm approach rather than a top-down approach which
requires us to guess the short term trends of the economy or an industry
(something that we and most other money managers cannot do with any
reliability). Once we have
identified suitable candidates that meet our rigorous requirements, we then ask
ourselves whether we are paying the right price. I.e., one that is likely to result in a
favorable outcome with less risk than more aggressive or speculative strategies.
The key skill set in value
investing is an ability to judge businesses from both a qualitative and
quantitative perspective. Qualitative factors include the strength and
durability of the franchise, the quality of management, the attractiveness of
the business model, and historical track record. We then determine the
company's earnings power and make an assessment of intrinsic value and
sometimes liquidation value as well.
Securities analysis is both an
art and a science, and we use our extensive finance experience and investment
knowledge, including our eight years on Wall Street to make these assessments.
With a few exceptions relating to corporate special situations, it is only when
attractive assets/businesses are available at a discount to our assessment of
intrinsic or other values do we plan to make an investment.
Note that being a value investor is not incompatible with being a growth
investor. This is a somewhat arbitrary distinction that has gained popular
currency in some circles. Instead, growth investing, as we practice
it, is simply an aspect of our disciplined approach. A company that can grow within its
franchise while earning a return in excess of its cost of capital will naturally
have a higher value than a similar no or slow growth company and thereby can
also be a value investment at a fair price and in certain periods.
We are looking for partners and clients that share our interest in long-term
performance and a disciplined approach to investment success. Our ideal
clients are intelligent, business-savvy, long-term oriented, and interested in
intelligent wealth preservation and growth. Though we can't promise results or
a get-rich-quick strategy, we believe that this get-rich-slowly approach is the
best way that we know to achieve significant long-term wealth
creation, both on an absolute and risk adjusted basis.
There is both qualitative and
quantitative evidence that indicates that a value approach to investing works. Quantitatively, a number of studies, which we can
provide upon request, indicate that portfolios based on a value approach (as
measured by quantitative criteria like low PEs and low price to sales and price
to book value ratios) have done well over rolling 10 year periods for most of
this century in a variety of market environments.
Qualitatively, a number of the truly
successful long-term investment records have been build by money managers
following an expanded definition of value investing. Some of these managers include
Warren Buffett, Charles T. Munger, Michael Price, and others.
Value
investing is not, of course, the only style of investing that has worked.
Other successful investors like George Soros, Peter Lynch, and perhaps
even Phil Fisher had a more trading (Soros) or growth oriented (Lynch & Fisher)
approach. Nevertheless, many investors following a value style have build
impressive long term track records.
While past performance does
not guarantee future success, we believe there is ample evidence that value
investing (and being price conscious) is a very attractive approach to
investing, especially on a risk adjusted basis.
The Ridgewood Group manages
separate accounts for both individuals and institutional investors. Select
clients may also invest in one or more investment partnerships that are open
only to accredited investors. The process to become a client is quick and
relatively easy. To learn more and access the necessary forms, go to
Services or How
to Invest
If you would like additional information, please contact us at 973-544-6970
or send us an email addressed to:
info@ridgewoodgrp.com
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