Investment Process

"An investor cannot earn superior profits from stocks by simply committing to a specific category or style.  He can earn them only by carefully evaluating facts and continuously exercising discipline."   -Warren Buffett 

At Private Capital Management, Inc. we believe change is constant in the financial markets and it continually impacts the suitability of an investment.  Our commitment to the continuous exercise of discipline and in-depth research, in addition to our proprietary quantitative manager selection model, helps us to find what we believe will be the leading investment managers in each asset class. 

Investments
In constructing our clients' portfolios, we find that No-Load mutual funds offer straightforward diversification across asset classes, geographies and investment styles.  In addition, actively managed mutual funds allow clients to leverage the extensive research capabilities, strong investment selection skills and proven track records of these investment managers.
We adhere to the principle that cost matters, which is why we use No-Load or Load-Waived mutual funds.  We are also able to provide our clients with access to many funds using institutional share classes which typically have a more attractive cost structure than those available to individual investors.  By actively seeking to minimize expenses, we try to maximize the earnings power of your portfolio.  We can also provide access to some managers whose strategies are closed to most new investors.
 
Investment Selection
PCM's proprietary quantitative mutual fund ranking system stems from over 50 years of investment experience and historically proven investment techniques.  Each month PCM screens a large portion of the No-Load mutual fund universe to find best in class investments.  The most attractive candidates are then ranked using our proprietary quantitative model.  Several of the elements in our quantitative model include statistical measures of alpha generation, risk and volatility as well as bear market performance, technical profile and some use of external ratings agencies.  This process is combined with extensive qualitative information gathered from meetings with fund managers and access to numerous leading independent research providers.
Our proprietary quantitative and in-depth qualitative research, based on decades of investment experience, helps PCM to locate what we believe will be the best investment managers in each asset class.  As a measure of our confidence in this process, we personally invest our money in the same manner and with many of the same investment managers as our clients.