We are money managers in the truest sense of the word
At Riverplace Capital we manage your money, we don’t farm out your portfolio or use standard models. We create our own investment models in-house and develop specified strategies for each client based on your goals and risk tolerance.
The principles we consider for including a company in our model portfolios are:
- Investing in good businesses with superior growth and profitability.
- Focusing on high-quality companies, particularly those with strong competitive advantages.
- Selecting organizations with great management is paramount.
- Concentrating on the long term is our goal.
- Being willing to go against the consensus is a constant—thus our Our Lonely Bull moniker. We stand strong and confident in our positions that are based on decades of experience.
- Paying close attention to valuation which can normalize both good and poor business environments.
- Diversification which can be both offensive and defensive in our strategy.
- Having realistic expectations.
In addition to these broad principles, we have set criteria that each company must meet. Those quantitative standards weed out many companies.
Some of the standards we use are:
- Revenues: Firms are of sufficient size to give us confidence in their durability and likely market liquidity.
- Market Capitalization
- Return on equity
- Return on assets
- Top line revenue growth
- Projected growth rate vs. price earnings ratio
- Relative strength
- Earnings predictability
- Technical strength
Companies that meet or exceed these standards must then fit into our model of a specified number of stocks. At any point in time, only so many positions are relegated to each economic sector. Any company not only has to be better than the last on the list, but also must fit into an existing slot or serve to add weighting to a sector in which we want more emphasis.
The modeling process helps us control risk. It also forces us to focus on a well-defined universe of stocks. To keep individual as well as sector weightings within predetermined constants, we periodically rebalance. We do this to reduce the risk of an individual position as well as that of a sector.