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Organic Investments

June 8, 2016

 

Welcome. It is with great pleasure and enthusiasm that the team at Summerhill Capital Management has launched its official blog! Our goal of this blog, titled “Organic Investments”, is to allow a forum in which we can discuss, highlight and provide thought provoking insight on topics that we believe will have a profound impact in shaping the future. In addition, we will also take the time to provide insight on underlying themes within the financial industry. As a long-term investor, it is imperative to be forward looking in identifying themes that have the potential to propel and progress our world forward. It is within this blog that we hope to educate our readers. So we thank you for taking the time and joining us on this journey.

 

Let us start by stating why we decided to combine the words “organic” and “investments” together in the naming of our blog. After all, this is likely the first time you have seen these two words used together or at least we hope so. However, we at Summerhill believe these two words fit very well together and are complimentary in nature.

 

We use the word “organic” due to its representation of purity. Many of you are already aware of its definition, where food or farming methods involve production without the use of pesticides or other artificial chemicals. We believe the underlying concept of this definition is equally relevant and applicable to the investing world. Investing is owning a stake in a quality company in which the purchasing decision is made based on fundamental rationale. Unfortunately, what is taking place in today’s stock markets is far from this simple principle. In a sense, the stock market has lost its purity as it has fallen victim to the influence of many non-fundamental, short-sighted forces. Hence, why a company’s share price can decline 5% immediately following the announcement of it missing earnings expectations by a penny…a penny!

 

The term Organic Investments brings the roots and foundation of investing together. That is, treating a stock as a long-term ownership position in a company, not an expensive piece of paper in which to gamble. Investing in companies based on sound fundamental analysis and not speculation. Recognizing there is no need to participate in dangerous, over-leveraged financial products to generate above market returns. This is the investment foundation in which Summerhill is built on and the philosophy practiced by its team. It is this back to the basics principle that will prevail in the long-term no matter what the short-term entails or what new miraculous innovative financial product Wall Street decides to create.

 

As a stockholder, you are a part owner of the companies that you are invested in. Never forget this! 

 

Sincerely,

 

The Summerhill Team

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