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.

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.

∙ We practice “value investing,” which is simply buying securities for considerably less than they are worth. We do not try to time the market, forecast macroeconomic outcomes, or predict the short-term movements of stock prices. We seek to buy good businesses for less than they’re worth.

∙ Market prices of businesses eventually converge with their underlying values, so an investor with a long time horizon has the ability to wait out short-term price fluctuations in order to recognize the gains from buying undervalued securities. We believe that having a long-term outlook gives us a competitive advantage.

∙ We seek maximum returns regardless of asset class, which means the mix of the type of securities the fund will invest in will change from time to time. We do not constrain the Bretton Fund to a certain type of security, sector, or market capitalization range. Given our expertise and the return potential, we will most often be invested in the stocks of US-based companies, particularly companies with strong economic characteristics.

In order to accurately value companies, we look for businesses we understand. We evaluate the microeconomic forces of a business, including how pricing is determined, competitive advantages, and future demand for the products.

We look for companies whose products will become increasingly relevant to the economy as a whole. If a company’s products become obsolete over time (e.g., camera film, horse-drawn carriages), it’s unlikely the company’s shareholders will achieve high returns.

We look for defensible businesses. A company can only generate high returns on its investors’ capital if it can protect its earnings from competition. We look for businesses with attributes that give them a competitive advantage, such as a strong brand, economies of scale, a network effect, or loyal customers.

We seek ethical businesses, and we will decline to invest in a company if we believe it has a material negative impact on the world.

Like most investors, we look for competent and ethical management teams. We also seek managers who are committed to shareholder returns, not just management returns.

A wonderful company may not always mean wonderful returns for investors; it depends on the price at which an investor acquires the ownership stake. Even a great company purchased at too high of a price will lead to poor investment returns. We determine the economic value of a business by estimating what the company will make in the future, and we will only invest when we can get a price considerably below our estimate of economic value.

To maximize our investors’ returns, we focus the fund on investments that we believe have the highest risk-adjusted return potential.

We believe 15–20 investments across various industries achieves a sufficient level of diversification while allowing the fund to be invested in our best ideas.

We do not constrain the portfolio to a particular asset class or market-capitalization range, nor do we try to mimic the sector weightings of a market index.


We seek to reduce risk to the Bretton Fund by avoiding investments that have a significant chance of a permanent loss of capital.

We avoid companies with excessive debt or other forms of leverage.

We avoid companies that are opaque or difficult for us to understand.

We avoid investing in companies at high valuations.

We avoid businesses in declining industries.

We avoid industries where individual companies cannot create a competitive advantage.

When We Sell

We sell a security when it becomes overvalued.

We sell a company when its business fundamentals have deteriorated.

We sell a company when we recognize that we were wrong about our original assessment of its business.