Equity Philosophy
Core thesis: Desirable businesses purchased below intrinsic value have a propensity to self-correct over time. Either a stock appreciates to fair value in the public market, or SCM expects the company to attract a strategic or financial buyer. Value is a condition, not a type of stock. Value exists at the intersection of three economic conditions: Market Environment, Economic Context, and Operational Momentum.
Market Environment
When the broader market or a sector mis-prices risk - through momentum, panic, or indiscriminate indexing - it creates a condition of value independent of a company’s label.
Economic Context
Macro conditions (rates, cycle, credit spreads) compress or expand multiples. A company priced as “growth” becomes value when the economy resets the discount rate against its cash flows.
Operational Momentum
A company at an inflection point - recovering margins, new management, a restructured balance sheet - carries value in its trajectory, not its trailing multiple. This is where the market is slowest.