Marshfield believes that process and discipline are essential for intelligent investing. Its seasoned research team engages in a rigorous collective process designed both to build a strong conceptual case for its investments while identifying inconsistencies and concerns and to achieve consensus while avoiding group-think. The Fund will typically hold from 16-24 equity securities plus a cash position. The cash position will, on average, be in the range of 0-25% of the portfolio and will be an output of the Adviser’s buy and sell decisions, not a tactical maneuver.
Companies on Marshfield’s “buy” list should have at least the following characteristics: resilience (i.e., the ability to sustain themselves during difficult times); profitability (i.e., a long-term return on equity above Marshfield’s discount rate); and disciplined, thoughtful management (i.e., who balance the interests of shareholders, customers and employees appropriately, and who think about the long term). Initial or enhanced positions in stocks on the list are only bought if and when they trade significantly below what Marshfield believes to be their intrinsic value. Stocks are most typically sold either due to price appreciation or because the conceptual theory no longer holds.