Ralph Whitworth

When we worked for Boone Pickens, he taught us that the most successful wildcat oilmen were not the ones who hit the most gushers, but the ones who knew when to plug a dry hole. I think we're disciplined about ignoring sunk costs. We mark our investments to market every day and say, “Okay, we [...]

Ralph Whitworth

There can be emotional aspects to all these investments, so there's a real benefit to having more than one person making big decisions. Our rule is that our investment committee has to be unanimous in order to buy something, but if any one of the three of us wants to sell, we sell it. That [...]

Ralph Whitworth

A full position is 8 to 10 percent of the fund's assets, but we typically work our way there over three or four tranches. At each step we're either gaining more confidence in the valuation and our ability to make a difference or we're not. For example, we generally don't meet with companies until we [...]

Ralph Whitworth

Our front-end screening is fairly automated, looking at both performance laggards and where implied expectations are pessimistic. We start with the proposition that the market is right about a company's valuation. If these assets, with this management, with this strategy, in this environment are worth $20 per share, can we identify changes in that composition [...]

Ralph Whitworth

Invariably the companies we zero in on have poor corporate governance, but we're far more interested in how the board makes decisions than in the tick-the-box governance items like whether they have a poison pill or a staggered board. Not enough boards think of themselves as shareholder representatives. That particularly manifests itself in setting compensation [...]

Ralph Whitworth

There are five ways for company management to spend money: dividends, paying down debt, internal investment, acquisitions, and share repurchases. When we see excess cash on a balance sheet we don't go in with a knee-jerk response like, “You better buy back your stock,” because that's limiting and can be stupid if done at the [...]