Today, near-term results have investors acting impulsively on daily stock price movements rather than taking a longer-term, businesslike approach to assessing a business's value. At Madison Investments, we believe that when you invest in a company, you’re not just trading a piece of paper but rather buying a genuine ownership stake in that business. Mid Cap Portfolio Manager, Andy Romanowich, explains Madison Investment's philosophy of investing with a business owner mentality.
Buying an ownership stake vs. trading pieces of paper
Most conventional investors are taught to follow a set of heuristics for investing, believing that for a company to be a good investment, its stock must fit a predefined mold based on certain characteristics. However, these characteristics tend to focus on near-term fluctuations in the stock’s price, as opposed to determining long-term value, as would be the focus of an owner of a business. At Madison Investments, we believe our role as investors takes on a bigger purpose. Here's how we think like a buyer:
Conventional Investing vs. Ownership Mentality
EXAMPLE: Carlisle Companies Overlooked in 2020
Carlisle Companies, a diversified industrial firm, faced significant challenges during COVID-19 and the resulting economic disruption. Download the PDF to see how Madison’s Mid Cap Equity team applied the business owner mentality to its analysis of the company.
Madison Mid Cap Equity Strategy
The Madison Mid Cap Equity strategy brings this philosophy to fruition. By investing with the mindset that we are buying a business, our research tends to focus on qualitative factors like competitive moats, customer preferences, management, and capital allocation decisions. These factors give us an indication of whether the business will survive and thrive over the long term and return value to shareholders.