Northbrook Investment Management, LLC

Most of the time stocks are subject to irrational and excessive price fluctuations in both directions...- Benjamin Graham
Rule number one is never lose money. Rule number two is never forget rule number one.- Warren Buffett
Time is your friend; impulse is your enemy.- John (Jack) Bogle
Look at market fluctuations as your friend rather than your enemy. Profit from folly rather than participate in it.- Warren Buffett
I paraphrase Lord Rothschild: 'The time to buy is when there's blood on the streets.'- David Dreman
Absent a lot of surprises, stocks are relatively predictable over twenty years. As to whether they're going to be higher or lower in two to three years, you might as well flip a coin to decide.- Peter Lynch
If you have trouble imagining a 20% loss in the stock market, you shouldn't be in stocks.- John (Jack) Bogle
What we try to do is take advantage of errors others make, usually because they are too short-term oriented, or they react to dramatic events, or they overestimate the impact of events, and so on.- Bill Miller
It's not always easy to do what's not popular, but that's where you make your money. Buy stocks that look bad to less careful investors and hang on until their real value is recognized.- John Neff
Invest at the point of maximum pessimism.- John Templeton
Even the intelligent investor is likely to need considerable willpower to keep from following the crowd.- Benjamin Graham
Shares are not mere pieces of paper. They represent part ownership of a business. So, when contemplating an investment, think like a prospective owner.- Warren Buffett
If you spend more than 13 minutes analyzing economic and market forecasts, you've wasted 10 minutes.- Peter Lynch

Investment Management

Philosophy

Northbrook believes in valuation analysis and fundamental long-term investing. While headlines and perceptions can determine short term prices, fundamentals determine long term value.

We believe that market psychology (fear and greed), an irresponsible news media, and an obsession with short term results tend to create significant market and individual share price volatility.
We believe that market and share price volatility can provide patient, opportunistic, long-term investors with the opportunity to generate excess returns.
In our opinion, many market participants confuse volatility with risk. We define risk as the permanent loss of capital, and risky investment strategies as those that result in permanent loss of capital. Our goal is to pursue an investment strategy that minimizes permanent loss of capital.
We attempt to generate capital gains by focusing on business fundamentals and valuations with an emphasis on quality businesses, significant cash flows, and strong balance sheets.
When a business meets our quality, cash flow, and balance sheet criteria, among others, our goal is to invest when its shares trade at a significant discount to our estimated value, and sell once they reflect this estimated value.