Investing success requires a sound plan, a proven strategy and skillful execution.

Plan: A detailed proposal for doing or achieving something; an intention to act, a goal.
Strategy: A policy designed to achieve a major goal.
Execution: The carrying out of a plan and a strategy.

We find that most financial advisers are more knowledgeable about planning than they are about strategy and execution. A financial plan is a must but without a first-rate strategy, success is questionable, and unless the strategy includes first-rate execution, the plan will not succeed.

Plans and strategies can sound so impressive that they seduce us into feeling like we’ve achieved something simply by talking about them. What’s needed is the discovery of the disciplines that get things done and the commitment to the hard work that must follow. Execution is the critical part and hardest part of investing.

Ben Franklin: Well done is better than well said.

In our view, the best way to execute a financial plan is to seek out and use investing best practices. Our goal is exceptional results over the long term, which we think is best achieved by investing in mutual funds, businesses and real assets we deem to be exceptional. We seek investments [equity and income] with low potential for long-term loss and high potential for long-term gain.

In choosing asset managers and businesses, we use our ‘best practice’ checklist:

• shareholder-friendly organization with a value-based, growth-driven mindset;
• durable competitive advantages, ethical business practices and a customer-centric culture;
• exceptional people with skill, integrity and meaningful ownership in their business or fund;
• financial strategy and flexibility to take advantage of opportunities; and
• track record of above-average long-term returns on invested capital.

For navigating the real world of volatile markets, we also have a checklist:

• We think the #1 mistake investors make is focusing on price rather than on value.
• Price is what the public market says something is worth and fluctuates constantly.
• Value is what rational investors think something is worth based on time-tested standards.
• Prices in the marketplace are often above or below values in the real world, due primarily to the actions and mood swings (greed and fear) of speculators and traders.
• History tells us that investment returns in the public world over time correlate [1-to-1] with financial results in the real world, so that’s why we focus on value and high-quality growth.

We enjoy the execution part because the achievement comes from the doing.