Charles Royce Quotes
103 Charles Royce Quotes (Chuck Royce, Royce Funds, Charles M Royce)
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[In October 2013.] Our first job is don't lose the money.
Charles Royce
[In January 1999.] We are not anti-growth. We are just anti-overpaying for growth.
Charles Royce
[In February 2012 on small cap’s and liquidity.] We buy when things are illiquid. We are buyers into that illiquidity moment.
Charles Royce
[In February 2012 on small cap’s and liquidity.] Illiquidity is another risk factor. And we want to be compensated for it.
Charles Royce
[In April 2013.] Risk is as important as reward.
Charles Royce
[In April 2013.] You have to suspend your fear in the short-term in order to capture the long-term performance.
Charles Royce
Essentially, we are interested in three things – a strong balance sheet, a record of success as a business, and the potential for a profitable future.
Charles Royce
[In 1972.] Very simply, I believe that the underlying fundamentals of any equity determine its market price – along with the general market trend.
Charles Royce
[In October 1992 on how he defines value.] It's a much-abused word. Nobody would claim to be a nonvalue investor. It is certainly not the opposite of growth. From our standpoint we are looking at the intrinsic value of the company as an ongoing enterprise.
Charles Royce
[In October 1992.] We spend a lot of time measuring financial risk… We're very debt-averse, positive-cash-flow-oriented, high-returns-on-assets-oriented.
Charles Royce
[In October 1992.] We're low-valuation-oriented. We are also very price-conscious.
Charles Royce
[In October 1992.] To the greatest extent possible, you want to stay out of the high-traffic zones in the marketplace, because if you're trying to cross Sixth Avenue in the middle of the day, you have a higher chance of being run over than on Eighth or Tenth Avenue.
Charles Royce
[In October 1992.] We spend a disproportionate amount of time looking at the past for clues about the future. We look at return patterns, performance in prior recessions, how managements conducted themselves when they got into trouble. But while a rearview mirror is very important in driving, you can't drive a car with just a rearview mirror. What we're really betting on is the future.
Charles Royce
[In October 1992.] You have to buy into the idea that the company has a sensible business strategy. We want to be damn sure that a company is not doing something either stupid or ill-conceived.
Charles Royce
[In October 1992 on having 400 different stocks.] It's somewhat like trying to know when lightning will hit which trees. If you have enough trees, you'll still have firewood at the end of the season.
Charles Royce
[In October 1992.] We stay true to our valuation-pricing standards, so we end up with a lot of what I call ‘boats between two shores,’ where the stock is neither a buy nor a sell.
Charles Royce
[In October 1992.] We have an open-door policy on ideas. We don't care how we get them. Our sources are the conventional: the financial press, outside analysts, our internal process…
Charles Royce
[In October 1992.] I'd like to think that most of our discovery process is homegrown, but I don't have the courage to cut the phone lines and throw out the mail.
Charles Royce
[In October 1992.] I personally don't think that meeting eyeball-to-eyeball with the CEO is necessarily going to get you anywhere. What you really want to do is complete your homework, get all your questions in mind and start getting your questions answered by a whole set of different means - and interviewing the CEO is only one of them. You want to talk with suppliers and other people who have known management for a long time… You want to know other ingredients besides just the facts.
Charles Royce
[In October 1992.] Theoretically, we would buy a large position at the right price. But that is unlikely. It is rare for us to develop a high level of confidence in a short time, because we review and review the stuff. In general, we are gradualists.
Charles Royce
[In October 1992.] If you do your work properly in the beginning, there's really no need to re-analyze a company every ten minutes.
Charles Royce
[In October 1992.] If the market declines 5 percent, it might generate 50 opportunities in stocks that had 25 percent declines.
Charles Royce
[In October 1992.] Selling, of course, is the toughest part of the equation. I'd love to say that selling is the opposite of buying, but in truth you can develop emotional attachments to the stocks you own.
Charles Royce
[In October 1992.] We are probably too patient with our stocks. We do take a long view, and we tend to buy cheaply, so usually price is not the problem. Opportunity cost is the problem.
Charles Royce
[In October 1992.] You can own something for ten years and make 20 percent. So you have to be vigilant about what you own and you have to draw lines in the sand about the limits of your patience. But frankly, the wind blows over the lines all the time.
Charles Royce
[In October 1992.] We pick stocks because, individually, they are attractive, and we can't rely on macro factors to be part of the decision process.
Charles Royce
[In October 1992.] That's how value investors win in the long run: They deliver better results in the lousy periods.
Charles Royce
[In January 1999.] Small-cap is now an efficient asset class, where you have to be extremely good all the time in order to do better than the averages.
Charles Royce
[In January 1999.] Your average billion-dollar company is not the same as your average hundred-million-dollar company, even if the world thinks of them all as one. Now, microcap is a distinct and separate asset class.
Charles Royce
[In January 1999.] We divide the world into two buckets - microcap and non-microcap. In microcap, we use a very conventional, diversified approach. Lots of discovery… We select 100 or so companies out of thousands, that we believe could double or triple over three to five years with low risk.
Charles Royce
[In January 1999.] Whenever one of these wonderful small companies has a hiccup, blows up, gets the flu, something that isn't crippling but definitely interrupts the flow, that sets up opportunities.
Charles Royce
[In January 1999.] We like insurance because it's complex, it's difficult for the average person to wade through the conventions.
Charles Royce
[In January 1999 on when he would give up on a stock.] We would give up when we thought the ingredients for success were not present as a business enterprise.
Charles Royce
[In June 2000.] We're not anti-tech... We're just anti- overpaying for something, especially if we just can't understand it.
Charles Royce
[In December 2008 on small-cap and micro cap stocks being overlooked by institutions and finding bargains.] The theory is that this is a historically inefficient area, that there’s less broker research, there’s less institutional interest, that people tend to sort of come and go and it sets up tremendous opportunities from time to time, and that over the long term, possibly, you can get a higher return, maybe in a hundred basis points or more.
Charles Royce
[In December 2008 on potential liquidity problems because small-caps are small.] Definitely. If we had to sell all the stocks in one day, we would have liquidity problems. So liquidity is a very real thing and it’s an important part of it. But liquidity is a risk. And you would like to think you’re going to get paid for that risk.
Charles Royce
[In December 2008] Liquidity is a risk… So the illiquidity, which is embedded especially at the smaller end of small, is a positive in the long term.
Charles Royce
[In December 2008] Management is important. Balance sheets are important.
Charles Royce
[In December 2008] Small is… there are lots of mythologies around small, they’re not so small. These are companies with 10, 15, 20 year track records with highly specialized businesses, often a narrow marketplace business.
Charles Royce
[In December 2008] Mr Greenspan seemed to think cheap money was the only outcome. I think that was wrong… Through our cleverness in financial instruments, we created, as [Warren] Buffett says, ‘weapons of mass destruction in derivatives.’
Charles Royce
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