Latham "Skip" Murfey III started Headwaters in 2009 after managing his family office for 30 years.
The history of Headwaters predates Skip's 40 years in the business as a result of his consulting with his father and grandfather on several multigenerational trusts. Skip's grandfather, Latham W. Murfey, worked as a broker 100 years ago, including serving on the Board of Governors of the New York Stock Exchange from 1949 to 1952. From this man, Skip got his inspiration to enter the investment business and his extremely long-term perspective on investing. Amongst the things he learned were that short-term investors can be divided into two distinct groups - winners and losers. On the other hand, long term investors have always historically been winners. After many years advising others on investing for the long term, Skip further observed that the most consistent and persistent winners were those stocks that paid dividends and raised them generously on an annual basis. This observation and further research resulted in the Headwaters Dividend Growth and Relative Yield Valuation Investing Method which we use today.
For generations, Skip's family has been passing down a portfolio of stocks and a long-term investment strategy that has changed little over the past 100 years, with a renewed focus on dividends and the growth thereof which drive total returns. The family motto has been: "if you cannot afford something out of income, you cannot afford it." This led to the 11th commandment and slogan of Headwaters, "Thou shalt not invade thy principal." This built the entire framework for the firm: Current Yield + Dividend Growth = Annualized Total Return.
After seeing the industry devolve into a world of high frequency trading, financial engineering, complexity, and most importantly, the massive array of underperforming funds and strategies, Skip decided to put the family dividend growth philosophy into an institutional portfolio in 2009.
Headwaters was founded on the belief that investors could outperform the market by investing in companies with economic moats and consistent dividend growth if purchased at reasonable prices.
Many investors ask us if we are either "value investors" or "growth investors." We strive to be investors who buy compounding growth at value prices.