The foundation of our Family Office is based on the following Tenets:

1. The Client's assets are the only important assets
We only invest as partners along with our clients, and as Labrusca investors we have the same opportunity, same downside, and focus on only one objective – achieving superior increase in real purchasing power. We have over 20 year investment perspective, so we anticipate a long-term association as clients and investors.

2. Clients trust us to be long-term investors and mistrust all information
Our own judgement based on our own long-term analysis is the only thing we trust. We are responsible and can blame nobody except ourselves. Being long term in your investment perspective will naturally filter out most of the informational noise encountered over the short term.

3. Do not strive to know too much yet be convinced with too little
The future is not known, and therefore conclusions have to be made under a varying degree of uncertainty. More information is better than less information. However, some facts are more important than others. It is crucial to be convinced of the key drivers of the investment being considered. If you can not verify the premise, it is highly likely that the conclusion will be on shaky ground: It is not the amount of data known that counts, it is its quality that matters. Pick your battles; if unconvinced, find alternatives.

4. Contrarianism; more rewarding when you are right, less costly if you are wrong
It is not instinctive in humans to go against the majority. Yet, when fundamental examination indicates that the majority is likely to be wrong about a company and its securities, this creates a great investment opportunity. The most common cause of low prices is pessimism - sometimes pervasive, sometimes specific to a company or industry; and optimism drives the opposite. We like unjustified pessimism because we like the prices it produces. It is optimism that is the enemy of the rational buyer, and the friend of the rational seller. Again, the fact that other people agree or disagree with you makes you neither right nor wrong. You will eventually prosper if your facts and reasoning are correct.

5. Have a substantial margin of safety
Invest in understood value opportunities but use caution in the predicted return to counter act probability of being wrong and unpredictable risks. Low expectations regarding the future prospects of an investment can lower the probability of disappointment as well. We are striving for absolute returns, so focus on risk of capital loss is more important that potential return – a substantial margin of safety is required between underlying value and market price. We try to price, rather than time, purchases and sales.

6. Change is Nature’s Delight, and the Catalyst the Investor’s
Buy the contrarian undervalued enough cases where subjectivity is not as important as facts. Stay away from everything else. However, there also has to be a combination of catalyst and value. A trigger is still required because it can be value releasing or a story, which is usually more appealing to market participants than facts. Merits of value do not reflect themselves in the market price automatic response. So, Cheapness and Change or Expensive and Exposed are required.

7. Be dogmatic about owning value opportunities, be pragmatic about what the market offers you
The “sweet spot” of mispricing varies over time, geographical markets as well as industries. The interrelation of stock prices and business conditions would not be complete without emphasizing that in the clash of speculative forces on the exchange, the emotions play a part which is not paralleled in the normal processes of commerce and industry. The speculative mechanism does all things to excess.
Those who seek to relate stock market movements only to the currents statistics of business will fail, because their judgement is based upon the humdrum dimensions of fact and figures in a game which is actually played in a third dimension of the emotions and the fourth dimensions of dreams. The market can therefore offer outstanding investment value for the more “pragmatic dogmatic” global investor.

8. Make things as simple as possible but not simpler
We strive to de-complicate our investment conclusions, our portfolio strategy and our company structure, but we are not over-simplifying. We are focused on economic principles, and not trying to exploit the market fashions of the day. Derivatives and other financial innovations may find a place in our world, but only as bit players in our investment strategies and tactics. All possible focus and energy should be spent on the underlying research and execution because the economic truth is always the strongest argument for an investment.