Fund Principles

We believe the best way to achieve excellent long-term returns is to invest with a long time horizon in a concentrated number of businesses whose underlying economic values are significantly greater than their current market values.

  • The value of any business is simply how much it earns for its investors over its life. We seek to understand the economics of individual companies to evaluate how much they can earn over time in order to assess their values. This underlying economic value is occasionally substantially different from the market price of what existing investors are willing to sell their shares for, and when this happens with a company that we understand well enough, we invest.
  • One of the most important advantages an investor can have is a long time horizon. The market value of businesses eventually converge with their economic values, and having the ability to wait out short-term market fluctuations gives an investor the ability to realize these gains. An investor with a long-term view can take advantage of panicked selling and buy businesses for a significant discount.
  • We seek to avoid permanent losses of capital. We can withstand the volatility of short-term quotational losses from an erratic market, but we try to avoid buying companies at prices greater than their actual worth and avoid investing in deteriorating businesses.
  • We recognize what we cannot do. We do not have the ability to predict the near-term movement of the stock market or forecast the growth of the economy as a whole. We do try to understand certain businesses well and invest when we believe there’s a likelihood of high returns.
  • Unless we see a significant number of high-return, attractive investments, we intend to maintain a moderate level of cash. This gives us the flexibility to deploy new capital when attractive opportunities arise.

We aim to treat shareholders fairly and honestly and to manage the Bretton Fund with a commitment to fiduciary duty to our shareholders.

  • We treat your investment as we would our own investment. The investment team maintains a substantial portion of their net worth in the Bretton Fund. We can’t guarantee investment results to our shareholders; we can guarantee that we’ll be in the same boat as our shareholders.
  • Our goal is to increase the wealth of our shareholders over the long-term, which we define as at least three, and ideally five, years. We do not manage the fund to track the overall market in a given calendar year, and we do not manage the Bretton Fund to fit into conventional definitions of investment styles and boxes. We seek unconventional success.
  • The Bretton Fund charges a single fee for its services and does not engage in practices we deem unfriendly to shareholders. We do not: charge shareholders load commissions to purchase shares; levy a marketing fee to promote the fund (“12b-1” fees); pay excessive commissions for portfolio transactions in exchange for research from brokers (“soft dollars”); offer multiple share classes of the same fund.
  • The adviser to the fund, Bretton Capital Management, is privately owned by its employees, giving us greater ability to act as a fiduciary to the Bretton Fund than would external or public ownership.
  • We strive to communicate clearly and honestly how your fund is being managed. We are frank about our failures as well as our successes and speak in plain language instead of confusing financial jargon.