Acorn Capital Partners :: Investment Philosophy

We are pleased and excited to introduce you to Acorn Capital Partners, the focus of which is to be an indispensable partner in the art and science of putting your money to work. It is the intention of Acorn Capital Partners to be a vital asset to the ultra-affluent investor or those individuals with the desire to take action in life to become ultra-affluent. There are three principles that we believe will set investors on this course. A focus on these principles are what set ACP apart from an investment portfolio you may have at any other firm.

The first of these principles is encouraging our clients to spend more time focusing on what Robert Kiyosaki calls in his bestselling book, Rich Dad Poor Dad, "Minding Your Own Business." It has been our experience that many people, especially those that are very successful in their chosen career, tend to spend so much of their time focusing on their "profession" in life that they neglect their "business." Your "profession" refers to what you do to earn income. Your "business" refers to what you do with your income after you receive it. Ultra affluent investors whose wealth is increasing, or individuals who are on the road to becoming ultra affluent, are those who spend time mastering the art of putting their money to work and building up their investment portfolio ("asset column"). Earned income (even if it is in large quantities) is typically the highest taxed of all income. It is the goal of ACP to help you build your asset column so that you make more money from your asset column than you do from your paycheck or profession.

The second principle is a concentration on smaller businesses that are not covered by larger investment firms on Wall Street. Since there are a smaller number of analysts following these companies, this is the place where investors may find the largest discrepancy between price and value. In fact, Warren Buffett himself speaks of the chapter on margin of safety in Benjamin Graham's book The Intelligent Investor as being one of the two most important essays on investing.* Our primary focus is on the small cap and microcap market, which is comprised of publicly traded companies with a market capitalization of U.S. $1 billion or less, roughly 4,000 companies in total. We refer to investments in this portion of the market as "acorn capital." By true definition, an acorn is the seed of an oak tree; in terms of your portfolio, the idea is investing in something small ("acorn") with the intention of it turning into something big ("oak tree"). We look for companies with proven management of high integrity with a vested interest in the common stock of the companies they manage. We look for companies with a competitive edge, whether this is a patent portfolio, strong brand or trademark, industry reputation, etc. Lastly, we look for companies that are significantly undervalued based on certain valuation parameters.

The third principle is a focus on pattern recognition. Chart patterns of financial markets can be described as graphic representations of human behavior. Chart pattern recognition began with the work of Charles Dow and the formation of the Dow Jones Index in 1884. With the formation of the average closing prices of 11 important stocks in the U.S. economy, 9 of which were rails, Dow believed that the judgment of the investing public, as reflected in the movement of stock prices, represented their collective evaluation of the future probability of the performance of an industry. While a fundamental analyst can study a vast array of fundamental data on the value of the underlying business and formulate an opinion on the business prospects, he has no tool to weigh the collective actions, opinions and needs of the owners and prospective owners of the security. Chart pattern recognition and interpretation is the study of the action of all owners or prospective owners of a financial instrument (currencies, commodities, equity, debt and derivatives). The study of chart patterns is a technique on which we spend a great deal of time studying and advising clients.

One of our favorite quotes of all time is from Napoleon Hill: "It is literally true that you can succeed best and quickest by helping others to succeed."** We are excited to work with you going forward and it is our goal to earn your loyalty through exceptional advice, integrity and service that is second to none.