The investment philosophy of Mountebank is two fold:
First: The philosophy is not to invest in stocks, bonds or other instruments because of past performance or current investment fad. Mountebank’s charge is to locate securities issued by companies that have a better than average chance of obtaining their goals of profitability and growth. The primary interest is in the underlying company. The focus is on finding companies that can deliver on their promises. Mountebank is more interested in the deliverability of the promise than the size of the promise.
Mountebank locates and investigates securities issued by companies, with reasonable and predictable promises, that can be acquired at prices low enough to provide a sufficient discount to the value of the company’s underlying prospects. If the discount is sufficient, the investment will offer upside potential and the added benefit of protection against price declines.
Mountebank is a value investor in search of reasonable, deliverable promises at a discount. This approach may require longer waiting periods for the success of the company to be reflected in the price of the securities. This approach and its longer holding period offers three advantages: a) lower tax rates if the investments qualify for long term capital gains rates, b) more net funds invested if securities appreciate at pre-tax levels as opposed to being re-invested after securities are sold and taxes paid, and c) fewer transactions and lower overall transaction costs.
Second: In conjunction with a fondness for value, Mountebank has an aversion to overvalued securities. When Mountebank finds securities that are substantially overvalued they will from time to time be sold short in hopes of attaining a profit by buying these securities back when the value of the underlying company is more accurately reflected in the lower stock price.
The practice of investing in securities that are true bargains, combined with
short sales of overvalued securities is intended to enhance return and decrease
fluctuation in the overall value of accounts.