Cheviot’s goal is to maximize our clients’ wealth and financial security by investing to emphasize both capital appreciation and the preservation of accumulated capital.
We seek capital appreciation by means of disciplined, value-oriented investments in common stocks, debt securities, and publicly-traded real estate. Investment programs consisting solely of fixed dollar and fixed income investments, such as bank deposits, CDs, treasury bills, and bonds may preserve capital, but will not produce capital appreciation.
We protect capital by means of portfolio management, including asset allocation, diversification, avoiding inherently risky securities, and by investing rather than speculating. Our value approach – shunning overpriced investments and striving to acquire those which are undervalued – helps to preserve the investor’s accumulated capital and to grow it safely over time.
We strive to earn favorable long-term rates of return in a less volatile manner than that which is endured via general stock market exposure. We regularly seek and monitor high quality, large-cap companies with strong balance sheets, high returns on invested capital, and growing streams of free cash flow. We prefer to own businesses with durable competitive advantages run by shareholder-friendly managements that are skilled at capital allocation. Shares of these companies are then purchased only when they become available at a discount to our estimate of their intrinsic value or true worth. Shares may be sold if the share price exceeds our estimate of intrinsic value, if there is a reduction in the quality of the underlying business, or if funds can be better deployed in a more attractive opportunity.