The Team constantly monitors existing holdings and prefers to “let winners run” as long as the original thesis remains sound and the company’s fundamentals and valuation are compelling. Inevitably though, positions must be exited and these decisions are predicated upon the following factors:
- Change in original thesis, including a deterioration or change in the company’s fundamentals.
- To make room for a more compelling opportunity. Maintaining a concentrated portfolio raises the hurdle for existing and potential investments, with only the most compelling opportunities earning a position in the portfolio.
- Target price has been met and the security is no longer attractive from a valuation perspective.
- Positions will be trimmed that exceed 5% of the total portfolio or the stocks weight within the benchmark, whichever is greater.
- A 15% price decline triggers automatic in-depth review, which may or may not lead to a sale.
Vision Capital Management maintains a long-term perspective on investing; anticipated annual portfolio turnover will be in the 20% – 50% range.