Howard T. Alter planted the seed for Roundview Capital when he founded Alter Asset Management, Inc. in 1992 to provide portfolio management services for high net worth individuals and institutions.
A Value Philosophy
The objective was straightforward – provide superior risk-adjusted returns over time.
The firm constructed portfolios of common stocks through intensive bottom-up research and analysis, and capital was invested by employing margin-of-safety principles. The firm performed quantitative screens through the universe of publicly traded companies. Businesses were then analyzed to determine their intrinsic value - the price a rational business person would pay to be the exclusive owner of the entire enterprise. Purchases of stocks were made when the market offered the opportunity to buy shares at discounts to intrinsic value. The firm sold businesses that reached their intrinsic value from price appreciation or deterioration in business fundamentals.
Value Investing Put to the Test
Stephen K. Shueh joined Howard in 1997.
The partners soon faced an environment that challenged their investment convictions. In 1999, stocks were reaching new highs as richly-valued technology companies pumped up the market. On August 15, 1999, they wrote a client letter with the heading, "A Train Wreck in the Making." They observed:
The most dangerous of these side effects is the dramatic speculative advance of a limited number of previously expensive securities fueled by short-term expectations of even more favorable price movements. With the appropriate credit to Oscar Wilde, investing has become a game where, "We know the price of everything and the value of nothing."
This has created a playing field where many good businesses with competent managements continue to be available at highly favorable prices. Patient long-term investors have the potential to yield very satisfactory returns over the next three to five years in securities that are currently unloved and overlooked.
They acted on their analysis which proved to be very painful through 1999 and early 2000 as these companies continued to lead the market to new highs.
The firm's value-based discipline sheltered client portfolios when the technology bubble finally burst. The Firm experienced strong growth during the aftermath of the tech frenzy as the benefits of a disciplined investment strategy proved itself. The firm's objective is to continue providing superior risk-adjusted returns over time, and to serve as a family CFO for client families.
Over time, the firm has assembled a team of seasoned professionals. George Andresen offers three decades of diverse leadership experience in the financial services industry. Janet Chen serves as our company CFO and is a tax professional who is a member of the National Association of Enrolled Agents. Janice Puccio is our administrative backbone, and completes many special projects on behalf of our clients. Roundview also enjoys close relationships with attorneys and outside tax professionals who complement our services.
Roundview was formed with the idea that all employees of the firm should have an ownership stake in the company. This partnership theme extends to all aspects of the business. It provides the firm with a distinct competitive advantage since all members of the company have a vested interest in the success of clients.
During a time when loyalty and stability have become a rare commodity, the two managing partners of Roundview have worked together for over a decade. Roundview Capital is an evolution of the partners' wealth management vision. Value-driven money management will always be the core, but the firm will continue to engender new opportunities to add value for clients and their families.