At Lucas Capital Advisors, our primary goal is the attainment of consistent, long-term growth on an after-tax basis. This is accomplished by establishing a diversified portfolio that requires only minor changes in weightings to perform well in both bull or bear markets. We prefer to allocate a portfolio?s equity and fixed-income exposure amongst individual securities for its many benefits, including tax management, interest rate risk control, and the ability to narrow our focus to the small universe of securities contained in our portfolios.
Unlike the multitude of money-managers who rely on a stock-picking approach to equity selection, we employ a top-down approach. We believe an analysis of the broader economy, followed by an analysis of industries within the economy provide a competitive advantage through the addition of apposite information that can be incorporated into the investment decision process. We employ a valuation model relying on a Return on Invested Capital framework to create a universe of securities.
Private third-party research is purchased with the firm?s funds for classes of securities where we do not have a competitive advantage in performing in house research and analysis. Careful attention is paid to obtain high quality and non-biased work. The research is obtained from firms that have no investment banking division or other conflicts of interest that would allow the appearance of anything but objective analysis.