The core principles of our investment philosophy can be traced back to lessons the founder, Carter McMillan, learned from observing the management of his family’s primary investment asset.  For more than three generations, both sides of Carter’s family have invested in timberland in the pine forests of southern Arkansas, where investment time horizons are thought of in terms of generations, rather than days, months, or even years.  Learning to view investments in this context helped shape the patient and disciplined approach to investments Carter holds to this day.

Although the assets Carter now manages for himself and his clients are traditional stocks and bonds instead of timberland, the core tenants of patience and discipline remain hallmarks of his investment philosophy. The ability to view investments through the lens of a longer time horizon provides a structural advantage over most other market participants.

It is said that after the Second World War when many foods were in short supply, it was common to see signs in eating establishments declaring that the proprietor “eats his own cooking,” suggesting that the cook trusted for personal consumption the same food being served to patrons. Conversely, less credible cooks chose to dodge the food restrictions of the time by feasting on much tastier cuisine themselves while serving their customers less appetizing meals.

Like a cook who eats the same meals served to their customers, we believe that a similar litmus test should apply to investment managers and the way they manage their own personal investments relative to those of their clients.  At McMillan Capital Management, we do not see the logic in investing with managers who refuse to “eat their own cooking.”