PHILOSOPHY

Successfully identifying a "Perception Gap"

A "perception gap" exists when consensus expectations fail to recognize the true earnings power of a given company. This perception gap is an underappreciated opportunity and can be either positive or negative. The greater this gap between consensus expectations and the true earnings power of a given company, the greater the opportunity for investment gains as the consensus recognizes reality and the gap is closed. Furthermore this creates an alpha advantage which is harvested during the period in which the perception gap closes.