Our objective

At Evans Capital Partners, the objective is simple: to beat the market with low fundamental risk.

We do this by:

  • Buying Value, Not Hype: Purchasing securities priced well below their intrinsic value based on careful analysis, fundamental economic models, and empirically demonstrated strategies.

  • Thoughtful Diversification: Building a concentrated, carefully chosen portfolio that is diversified across industries to reduce industry specific risk while allowing each investment to matter.

  • Protecting Capital: Avoiding practices that can lead to permanent capital losses - no margin, no shorting, no options.

Guiding Principles

Evans Capital Partners employs long run successful strategies informed by economics models, market-beating investors, and academic research.

  1. Invest in Undervalued Securities

    Empirical research has identified the types of investments that have on average beaten the market. This includes companies with tangible book value that is in excess of market value; selling at low price/earnings ratios relative to steady state; that are in out-of-favor industries; that have low market values; and that have low stock prices. We are looking for firms that are very cheap relative to clear long-run, steady-state economic fundamentals.

  2. Invest in Firms and Industries that are Sustainable for the Long Term

    The market is always in flux, technology is evolving, regulations change, and demand changes. It is impossible to accurately forecast all the factors that will affect future prices. We focus on industries that will endure for the long-term, regardless of short-run disruptions.

  3. Invest in Management that is Competent, Honest, and Shareholder Friendly

    Of critical importance is assessing management. Even seemingly good investments can go wrong if management is poor. This is difficult to do because many of the actions that management take are not publicly visible; but some are. For example, does management keep costs down; does it follow strategies that will improve future profits; does it repurchase shares when they are cheap; does it understand the benefits and costs of chasing growth; does it chase the newest managerial fads; is it forthright with shareholders?

  4. Willingness to be a contrarian

    To beat the market requires doing something different than the crowd. This means purchasing securities that are out of favor and avoiding the current high fliers.

  5. Willingness to own a concentrated portfolio

    There are very few investments that meet all the guidelines outlined above, and fewer still that can be identified. To beat the market requires a portfolio of relatively few investments (typically less than 10). The trade-off of increased short-run variance is elevated long-term returns.

  6. Create a diversified portfolio

    Despite creating a concentrated portfolio, diversification reduces some forms of risk. Our diversification is achieved by making deliberate allocations across various industries that are likely to experience uncorrelated shocks. The process involves assessment of the broad movements of industries. The result is an intelligently diversified portfolio despite containing relatively few assets.

  7. Patience

    It can take a long time to identify excellent investments, and it can take a long time for the market to revalue the asset. In the meantime prices can drop - dramatically. It takes fortitude and patience to ride out the short and medium run volatility to earn excess long-rum returns. Patience might be the hardest attribute to acquire. It might be the critical attribute leading to the highest returns. Completing thorough due diligence and completely understanding the investment thesis makes being patient possible. We don’t chase high-flying industries, and we don’t sell because a stock price has dropped. We endure to achieve excess long-run returns.