Broyhill Letter Highlights I: Our Edge

Introducing Broyhill Letter Highlights! 

In an effort to introduce new investors to Broyhill, after spinning out from the forenamed family office, we reviewed every investor letter we've published over the past decade, to pull out the recurring themes that best illustrate our investment philosophy.

Given how much we tend to repeat ourselves over the years, we were quite surprised by the sheer amount of material that resulted.  So rather than overwhelm investors with one big word dump, we created an abbreviated series of the Best of Broyhill, which we'll divide into 14 blog posts distributed weekly for the next seven weeks. 

For those who would like to revisit our letters in full, we will also be gradually sharing them to our Research Studio throughout the series.

I: Our Edge

Simply put, we operate with a different mandate. The advantage of being founded in the foothills of the Blue Ridge Mountains is that we operate outside of the fray. Removed from the noise, we are able to climb the mountain and survey the investment landscape with a rational, objective, long-term perspective.

You don’t need Broyhill in a bull market. It is only in a bear market that Broyhill’s disciplined value-driven approach becomes a necessity, aiming first to protect capital before pursuing potential gain.

We have built Broyhill to thrive in challenging environments. Everything we do is laser-focused on one goal – protecting investors’ capital. Simply put, this is where we earn our keep.

Our broad mandate is one of Broyhill’s core competitive advantages, particularly relative to peers trapped inside a single style box. That flexibility allows us to look across market segments for the most attractive risk-versus-reward opportunities.

Many investors play the conventional game and fail conventionally. As a result, the majority fail to keep up with the professionals who fail to keep up with the market. Institutions have more information, more money, and more time to dedicate to investment decisions. In reality, however, the very thing that gives these giants their size is also the source of their greatest weakness. Our ability to recognize this weakness—and capitalize on it—is precisely our edge. We make our own more rational, rules. We are patient. They are not. We aren’t forced to follow the herd. By definition, they are the herd. While most institutional managers spend their days and nights rifling through meetings, sorting through emails, and rubbernecking at Bloomberg and CNBC, we sit in a quiet room and read and think. By designing our process to tune out the noise and make better decisions, we have tilted the odds in our favor.

Our long-term orientation allows us to look out further on the horizon to capture investment returns that are just not available to those focused on the next data point or the next quarter. So, we put one foot in front of the other each day, recognizing that excellence is achieved one step at a time.