Welcome To Cascade Investment Counsel, a division of Harfst and Associates, Inc.
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Frequently Asked Questions
Why do you maintain an approved list?
We maintain the Cascade Approved List for the same reason that major trust departments have: First to insure that our very high quality standards for each investment are met in advance of purchase, and to focus our research on what is really important to our clients. We believe that as stock market data becomes increasingly pervasive in our culture, it is more important than ever to stay focused and avoid distraction. Our focus is quality, and our Approved List keeps us on point.
What are your purchase disciplines?
We look for securities that offer a current yield that compares favorably with its own historic level, or is yielding more than “normal”. By definition, such issues are out of favor, or out of the favor they once were. Entire industries rise and fall from favor and we monitor them as they go up and down. We generally act in a contrarian manner seeking value among those issues which are down, but not in serious trouble. We generally own about 25 issues with no more than 5 in any narrow SIC group. We hold issues in a minimum of 5 broadly defined industries.
What are your sell disciplines?
We always sell issues when they no longer qualify for the Cascade Approved List, or when projected earnings become insufficient to support the dividend adequately. We generally sell when issues reach a relative current yield that is historically too low for the current market cycle or when we can substitute another qualified issue that will provide a greater return to the portfolio, and always if deemed prudent. We make minor sales to achieve balance, diversification, and current yield needs.
What is your fundamental and technical research focus?
Our fundamental analysis begins with the Cascade Approved List, which gives us our working universe. Next we look at broad industry fundamentals to avoid over-emphasis on those in broad decline. Last, we look carefully at each company to make sure it fits the portfolio needs. We use some technical analysis to aid in the timing of entry and exit points, because it just makes common sense to be aware of the price action of the securities in the portfolio. While we observe up and down volume, relative strength and other factors, our decisions are rarely dominated by technical factors.
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Harfst and Associates, Inc.