Investment Philosophy

Financial

Lighthouse Investment Services believes that the market is an imperfect instrument for valuing securities. This provides an opportunity to buy securities at a discount to their true value.

Lighthouse Investment Services will only invest in securities when it is confident that the true value of the security is significantly greater than its market price. By doing this we can remain reasonably insulated from the emotional pull of the market. Rather than having a ready portfolio for clients to invest in at any time, we will have fewer investment opportunities at any one time, but these recommendations will be high conviction. This approach may lead to a shortage, and even an absence, of recommended investments from time to time, however we believe that not losing money is the first step to successful investment performance.

We will only invest in securities that we understand and we recognise that we cannot understand every business.

Ethical

Lighthouse Investment Services will not research or recommend investments in companies that it considers "unethical". Whilst this is a necessarily subjective assessment, in broad terms it will not research companies engaged in logging of old growth forests, that employ exploitative labour practices, that engage in factory farming, or engage in other behaviour that we deem to be "unethical".

We believe that this approach will help us to both sleep better at night and assist in delivering superior returns. We believe that the ethical character of management often serves as a reliable "litmus test" of its broader ability. (For example the CEO of an energy business that is not already thinking in terms of a carbon economy is simply not doing their job.)

When you own shares in a company you are in business with the directors and managers of that company. We wouldn't dream of being in business with someone if we had any doubts about their honesty or integrity, so we also wouldn't dream of owning shares in a business where we had such misgivings about our business partners.