Life is nothing but an endless stream of liabilities separated first by needs, then by wants. It’s our job to offset them with assets that provide positive cash flow in later life.
Latham “Skip” Murfey III
Latham W "Skip" Murfey III started Headwaters in 2009 after some thirty years in the business pursuing the ultimate goal of reducing - in effect eliminating - risk and producing powerful returns for his clients.
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 over a century ago, including serving on the Board of Governors of the New York Stock Exchange from 1949 to 1952.
Inspired by his grandfather, Skip chose to enter the investment business to share 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
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.
The Murfey family has advised clients on their investments for more than a century in northeast Ohio with the objective of creating and growing multigenerational wealth.