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Avitzur Asset Management, LLC (AAM) ground Rules

1. Long term investing
AAM is not investing for the short term. We are here for the long haul, and from time to time a portion and even a large portion of your investments will be in cash equivalent investment until a great business will be offered to us at a discount of its intrinsic value or a special situation will present itself.

2. Analyzing a business not a stock
AAM believe that a stock represent a fractional ownership of a business. Every stock represents a piece of a business and not just a piece of paper. AAM will try to analyze the business with the assumption that over the long run the stock will represent the underlying business or as Mr. Benjamin Graham have stated: "In the short run, the market is a voting machine, but in the long run it is a weighing machine."

3. Focusing on intrinsic value and not market price
AAM try to evaluate the true value of a publicly traded company (its intrinsic value) in the same manner as a private investor tries to evaluate what is the true worth of the business that he/she wishes to purchase (its intrinsic value) before purchasing it.
The market and the stock price are here to serve us and not to guide us. AAM will attempt to take advantage when the stock price represents a wide discount from the intrinsic value.

4. Yardstick and performance measurement
AAM believe that in order to evaluate our performance we need to establish a yardstick by which we will be measured. AAM uses the S&P 500 which represents the 500 major US companies as our yardstick.

We consider a period of at least 3 years and preferably 5 years as a minimum period for measuring AAM performance. AAM results should be measured over the long run and not on a quarterly or even a yearly basis as it is our belief that just over the long run the market price truly reflects the business value behind the stock.

5. Eating my own cooking
Most of my family investments funds are invested in the same securities as those in your managed account. I will purchase and sell in my family account the same securities that I will purchase and sell for your individual account. Although this does not guarantee superior performance it guarantees that our interests are aligned.

6. Stock price fluctuation
From time to time a stock that we have purchased will experience a decline in price; we should welcome these reductions as an opportunity to buy more of the great business at a cheaper price and not as an event that should cause panic and confusion about the real reasoning behind purchasing the stock at the first place.


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