A View from Research: Tariffs and Trade

Tariffs and Trade – Raised tariffs are leading to increased tensions with some of our largest trading partners while creating uncertainty and volatility in equity markets. Nobody knows what will ultimately come from these maneuvers or the eventual impact on business values. At the same time, management teams of the companies we hold are implementing plans to help lessen the negative impacts under various possible scenarios.*

* FactSet & Bloomberg financial data systems. Data as of 8/31/18.

Please see Fenimore disclosure.

A View from Research: Interest Rates

Interest Rates – While interest rates have risen, they remain low. We believe that our long-held aversion to enterprises with a lot of debt, as well as our more recent strategic avoidance of corporations that suffer with higher interest rates, has our portfolios well-positioned should rates continue to rise.*

* FactSet & Bloomberg financial data systems. Data as of 8/31/18.

Please see Fenimore disclosure.

A View from Research: Inflation

Inflation – In addition to wages, costs for commodities, energy, and transportation have been on the rise. These costs are forcing some firms to raise prices to maintain profits. One of Fenimore’s key indicators of a quality business is the ability to raise prices without much customer pushback. In aggregate, we estimate that our portfolio companies are in good shape, but it is something we continue to watch.*

* FactSet & Bloomberg financial data systems. Data as of 8/31/18.

Please see Fenimore disclosure.

Volatility Can Provide Opportunities

“If volatility continues, it can provide opportunities to invest in quality enterprises – that meet our criteria – at a discount. This is key as we seek to continually enhance the Fund’s holdings while preserving and growing your wealth over the long term.” — John D. Fox, CFA, CIO

Read FAM Funds’ Semi-Annual Letters:
Chairman’s Letter, FAM Value Fund, FAM Equity-Income Fund, FAM Small Cap Fund

Volatility Can Provide Opportunity: Understanding Price vs. Value

“Having a strong foundation gives us the confidence to stick to our time-tested process during volatile times. When the stock market dips and investors may sell out of fear, Fenimore’s team gets excited about the possibility of buying stock in quality businesses at bargain prices. I realize we state this fact often, so, with volatility in the headlines again, it is a good time to look more closely at the heart of the matter. As value investors, the key as to why market drops can provide opportunity is understanding price versus value.” Read More.


Please see Fenimore disclosure.

 

Mutual Fund Observer Features FAM Value Fund

Regarding the FAM Value Fund the article states, “It deserves to be better known, most especially by equity investors looking for a committed team, a value-sensitive strategy and a long, consistent record.” READ NOW


Past performance does not guarantee future results. Current performance may be lower or higher than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Please consider a fund’s investment objectives, risks, charges and expenses carefully before investing.

Fund selection was determined by the subjective criteria of the author. No objective criteria for selection (e.g.; performance returns, manager tenure, expense ratio, etc.) were evaluated for identification of these funds. Consequently, other mutual funds not identified in the article or considered by the author may have similar characteristics.

The views herein are provided for informational purposes only and are not otherwise intended as an offer to sell, or the solicitation of an offer to purchase, any security or other financial instrument. This summary is not advice, a recommendation or an offer to enter into any transaction with Fenimore or any of their affiliated funds.

All projections, forecasts and estimates of returns and other “forward-looking” information not purely historical in nature are based on assumptions, which are unlikely to be consistent with, and may differ materially from, actual events or conditions. Such forward-looking information only illustrates hypothetical results under certain assumptions and does not reflect actual investment results and is not a guarantee of future results. Actual results will vary with each use and over time, and the variations may be material. Nothing herein should be construed as an investment recommendation or as legal, tax, investment or accounting advice.

These materials are not intended to be complete or to constitute all of the information necessary to evaluate adequately the consequences of investing in any securities or other financial instruments described herein. Investors should ensure that they obtain all available relevant information before making any investment. Any investment entails a risk of loss. An investor could lose all or substantially all of his or her investment. Past performance is not an indicator of future results.

Please see Fenimore disclosure.

 

Quest for Quality

The stock market peaked in January and is going through a correction as we write this in early February. We have had a long period of stock prices increasing — this correction is a natural part of the process. To reiterate, the fundamentals of the economy and Corporate America are still very strong. In fact, this type of environment can provide opportunities to invest in quality companies, both existing and prospective holdings, that have declined in price. Read More

 

Please see Fenimore disclosure.