Deep value investing
Buying dollar bills for 50 cents.
True bargains only appear when something has gone wrong and most investors want out. Our job: tell a wounded business from a dying one, and be paid well for the wait.
The lineage
Two traditions, one discipline
Tim McElvaine formed the McElvaine Value Fund in 1996 and has managed it ever since. He learned the craft alongside Peter Cundill, as CIO and co-manager of the Mackenzie Cundill Value Fund. Cundill's discipline was margin of safety: buy well below what a business is worth, and let the gap do the work. Tim summed him up in three words: passion, patience and discipline.
Read Tim's 2008 tribute to Peter Cundill
Lorne Porayko still practises critical care medicine, and brought Sir William Osler into his investing with him. Osler, a Canadian and the father of modern medical teaching, insisted that doctors examine the patient in front of them rather than recite from textbooks: observe first, diagnose second, and admit plainly what you don't yet know. Applied to a company, that is much the same job: gather the evidence, name the problem precisely, and resist the story everyone has already agreed on. Lorne became a portfolio manager of the McElvaine Value Fund in August 2026, when The Osler Fund was merged into it.
Different schools, same habit of mind. Since 1996 this fund has run on it: patient, contrarian, focused on what a business is actually worth.
The framework
ABBA: four questions before we buy
Accident
Nothing sells at half price without a reason. We name the accident precisely. If we can't explain the bargain, we pass.
Bird in hand
A bird in the hand is worth two in the bush. We pay for value that exists today (real assets, cash, earnings we can see), not for a forecast of what someone hopes will happen.
Brick house
Staying power: like the third little pig's house, it has to stand when the wolf turns up. Cheap and fragile is a trap, so we insist on the financial strength and business durability to endure a downturn without diluting shareholders.
Alignment
We want managers with real skin in the game. When things get difficult, incentives decide behaviour.
First principle
Protecting the downside comes first
Losses and gains are not symmetrical. A holding that falls by half needs to double just to get you back to even, and the years spent recovering are years that earned you nothing. So the first question we ask about any investment is not what it could be worth, but what could go permanently wrong.
That is why brick house is a gate rather than a preference, why we hold cash when nothing meets the standard, and why we insist on buying at a discount: the discount is the margin for being wrong. Whether you are still building your capital or starting to draw on it, that arithmetic doesn't change.
Patience
Cash is a position
When nothing meets our standards, we hold cash and wait. Forcing money into fully priced markets is how downside protection is lost.
Concentration
A short list, known deeply
We are not a “Noah’s Ark” fund and instead own a carefully researched set of somewhere between 15 and 25 securities.
What we believe
Our convictions
- Real bargains only appear when others are selling for reasons other than price.
- Protecting the downside matters more than chasing the upside.
- Cash is a position. Peter Cundill would always counsel patience, patience, patience. We believe being willing to wait gives us an advantage.
- A manager should have their own money in the fund, on the same terms.
- Results should be judged in years, not quarters.
What we don't believe
What we won't do
- We don't believe we can time markets, and we don't try.
- We don't buy something just because it's popular, or an index owns it.
- We don't force money to work when nothing meets our standards.
- We don't charge you more just because assets grew.
- We won't pretend a bad year didn't happen. Our letters say so plainly.
See the approach in practice
Our reports and letters walk through real decisions: what we bought, why, and how it worked out.