Our Investment Philosophy

Preston Werth, our Chief Investment Officer, is central to how we invest. He earned both his undergraduate degree and his MBA at the University of Chicago. Its Booth School of Business was ranked third in the country this year by U.S. News & World Report, behind Stanford and Wharton and ahead of Harvard, Kellogg, MIT, and Columbia.

The school matters for more than the ranking. Much of modern investment research comes from the "Chicago school" of finance, including the work that earned Eugene Fama the Nobel Prize for showing how efficiently markets price information. Some of the most respected investment firms in the world were built on that research. Preston's thinking is rooted in the same tradition, and it forms the foundation of our process.

Our starting point is humility. Markets are remarkably good at pricing securities. Every day, millions of investors, many with far more resources than any individual advisor, compete to find mispriced stocks. That competition drives prices close to fair value, which makes consistently beating the market extremely difficult.

For that reason, we're deeply skeptical of advisors who claim they can pick individual large-company stocks that will outperform. The evidence says most professionals who try, fail, and they charge their clients for the attempt. We don't build portfolios around stock tips, forecasts, or hunches.

Instead of guessing, we rely on a quantitative approach grounded in decades of academic research. That research has identified characteristics associated with higher expected returns over long periods, such as smaller companies, lower relative prices, and stronger profitability. We use broadly diversified, rules-based strategies that lean toward those characteristics in a disciplined, low-cost way.
The result is a portfolio built on evidence rather than opinion, designed to capture what markets offer while avoiding the risks of concentrated bets.

Every dollar paid in fees is a dollar that no longer compounds for you. Over decades, the difference between a low-cost and a high-cost portfolio can amount to years of retirement income. We work to control costs at every level:

Advisory fees. We keep ours competitive and transparent, and we don't sell products or earn commissions.
Fund expenses. We favor investments with low expense ratios.
Hidden trading costs. We pay attention to the costs that never show up on a statement, including bid-ask spreads, excessive turnover, and inefficient trading.

We believe markets are highly efficient, but investors are human. Fear and greed can push the market as a whole to extremes, and those extremes can create opportunities for disciplined, patient investors willing to go against the crowd.

That's why we watch market valuations closely, including the Shiller CAPE ratio, which measures stock prices against a decade of inflation-adjusted earnings. We don't use valuation measures to make short-term predictions. We use them to understand where we are in the cycle and to inform rebalancing and risk decisions with a clear head, especially when others are losing theirs.

We consider ourselves students of Warren Buffett and Charlie Munger. Buffett taught generations of investors to stay patient, keep costs low, and be willing to act when others are fearful. Munger's idea of a "latticework of mental models," which means drawing on many disciplines to think more clearly, is the inspiration for our name.

We also draw heavily on Howard Marks, whose writing on market cycles, risk, and investor psychology shapes how we think about when to be cautious and when to lean in.

Our Investment Philosophy

The People Behind the Process

We Respect the Market

A Systematic, Evidence-Based Approach

Costs Are Critical

Where Patience Pays: Thinking Like a Contrarian

Our Influences