Tweedy, Browne Company

Our Philosophy

Tweedy, Browne practices a value investment philosophy derived from the work of Benjamin Graham. The investment team seeks to exploit discrepancies between the stock market price and its estimate of that company’s intrinsic value. Tweedy, Browne seeks to construct a diversified portfolio of stocks that are trading at a significant discount to our estimate of their intrinsic values. Investments are generally sold as the market price approaches or exceeds intrinsic value, with the proceeds reinvested in other situations offering a greater discount to intrinsic value. The Firm generally emphasizes a long-term, low turnover strategy grounded in individual stock selection.

Our Approach

Tweedy, Browne’s research seeks to appraise the worth of a company, what Graham called “intrinsic value,” by estimating its acquisition value, or by estimating the collateral value of its assets and/or cash flow. The term “intrinsic value” may also be referred to as private market value, breakup value or liquidation value. The process is more closely related to credit analysis, for as we have said, we are more concerned with the return of our capital than we are with the return on our capital. Investments are made at what we believe to be a significant discount to intrinsic value, which Graham called an investor’s “margin of safety.” To the extent market conditions warrant, investments are generally sold as the market price approaches intrinsic value, with the proceeds reinvested in other investments that we believe offer a greater discount to our estimate of intrinsic value. Adhering to the principles of intrinsic value and margin of safety results in an investment policy that runs counter to the general market psychology, and seeks to reduce the decision to purchase or sell securities to a discipline rather than an art.