Over a four-decade journey through the evolving landscape of public equity investing, SGCP emerged as our family office.
While also operating a successful marketing business, our founder’s investment focus of the first decade was on selecting outstanding mutual fund managers in which to invest. Reviewing fund performance, reading managers’ commentary, and cultivating insights into their investment philosophy and styles. This process provided the foundations of investing wisdom for transitioning from passive mutual fund allocator to active stock selection and portfolio management.
The next decade was highlighted by massive technological disruptions, including the expansion of the Internet and an evolution in the landscape of public equity investing through online discount brokerage services. In March 2000, the dot-com bubble burst, and the NASDAQ plummeted over 70% in seven months. The expensive lessons learned during this time reshaped our understanding of risk management, the emotions of investing, and the volatile nature of public markets.
During the 2008 financial crisis, our actively managed equity portfolio performed better than most “safer mutual funds.” This resilience was the catalyst for reallocating capital to develop our own portfolio with concentrated positions in quality-growth companies. These were businesses poised for long-term growth, with the ability to compound earnings and stock price appreciation over 3-5 years and beyond.
Managing a portfolio means you’re always finding new ways of making mistakes. Stock price volatility arouses the twin demons of fear and greed, which breeds bad decision-making. Embracing emotional discipline and understanding market psychology are the cornerstones of the SGCP approach to building & preserving wealth.
Experience, as they say, is the best teacher. Fortunately, investing knowledge also compounds over time. Years of learning experiences, developing processes, and active risk management remain instrumental in minimizing the impact of future mistakes
Over the years, we have allocated capital to alternative asset classes such as private equity and commercial real estate, which has been a fruitful endeavor that has expanded our knowledge and informed our investment approach. However, our deep passion for active investing in public equities, validated by the robust long-term compounding achieved in our managed portfolio, has focused most of our time and resources toward running an active public equity strategy.
At the start of 2021, we formalized our investment approach by creating a single-family office to direct investments and run daily operations. Today, SGCP manages a concentrated equity portfolio of 15-20 high-conviction holdings focused on delivering durable compound growth & stock price appreciation. These companies are sized in a resilient portfolio constructed to ensure a legacy of wealth for future generations.