Safety First Investing
"Never risk what you have and need for what you don't have and don't need." Warren Buffett
If you are already wealthy, it doesn't make any sense to unnecessarily risk your wealth for further wealth. At Valor, we have a unique 'safety first' investment philosophy derived from aviation principles that is designed to avoid permanent damage to your wealth. Having been an international pilot for 23 years, I have built this risk mitigation framework derived from aviation safety first principles.
We use aviation 'safety first' techniques such as checklists, threat and error management, multiple backup principle, independent calculations, the Swiss Cheese model for risk mitigation, focused knowledge (limited destinations) and we have emergency procedures for when things go wrong. Few do what we do. Most simply focus on upside and forget the potential permanent losses that can occur during cycle ending corrections.
Having systematic procedures for reducing the risk of permanent loss helps our clients build permanent wealth with confidence.
Our portfolios are currently nearly 90% invested in companies that have no net debt and are net cash. It is fair to say that we take safety very seriously at this point in the cycle.
If you are not yet wealthy and have many years of income that will be worth far more than your current investible assets, then you can take more risk, however if you are already wealthy, it doesn't make sense to take risks that could one day make you no longer wealthy.
We invest for the already wealthy and take the permanence of their wealth as seriously as a pilot treats the safety of his or her passengers.