Marcellus Capital Management helps clients grow their wealth by owning companies with sustainable competitive advantages and above-average returns on investors’ capital. Fixed income investments play an important role in many of our clients’ portfolios, but the heavy lifting is done by long-term investments in publicly traded equities. MCM helps clients view stocks for what they are — partial ownership stakes in businesses — and understand that in the long run, the best way to achieve good investment returns is to own good businesses.

We are loss-averse investors and avoid exposure to speculative investments, companies without track records of profitability, or those with highly leveraged balance sheets. One of MCM’s core tenets is that high-risk investments are not only unnecessary in order to achieve good returns, but eventually lead to losses and consequently poor returns. In other words, we beg to differ with Thomas Jefferson’s maxim “With great risk comes great reward.”

MCM’s clients typically invest in a combination of index funds, actively managed mutual funds, and individually chosen securities, but we do not view these as distinct “asset classes.” Whatever form the investment vehicle takes, what matters is the quality and value of the underlying assets. Our idea of a high-quality business is one that has 1) an above-normal level of profits relative to employed capital that derives from long-lasting advantages over competitors, 2) attractive growth opportunities, which allow the business to reinvest its profits into additional assets that will support even greater profits, and 3) a talented and honest management team that thinks and acts like owners of the business. Marcellus Capital is cognizant of value in investments — a great business can be a lousy investment if you pay too much — and we strive to pay reasonable prices for what we own, whether we invest through funds or individual securities.