Capital Counsel and other investment advisers who manage assets above $110 million must register with the Securities & Exchange Commission (SEC) to comply with the Investment Advisers Act of 1940. Registered investment advisers (RIAs) provide advice about purchasing and selling securities to their clients and have a fiduciary duty to their clients to always act in their best interest.
Summer 2026
WHY EARNINGS MATTER
Over time, earnings growth drives stock prices.
In our quarterly letters, we discuss our companies’ revenues and earnings and how they were achieved. We only invest in companies that generate earnings—the amount left after subtracting all expenses and taxes from revenue. Why do earnings matter? Companies use earnings to pay dividends to shareholders and to provide cash to reinvest in its business. Investments in research and development to spur innovation, in capital expenditures to expand operations, and in acquisitions to broaden product offerings generate future earnings growth. Without earnings, a company relies on external financing such as debt, which reduces operational flexibility, issuing new stock, which dilutes the ownership of existing shareholders, or selling assets. Managers at companies with dependable earnings from operations can develop innovation and expansion roadmaps for the long term. Over time, earnings growth drives stock prices. Consistent earnings growth allows returns to compound.
Our purpose at Capital Counsel is to help our clients achieve their personal and financial goals by investing in great companies with persistent and growing earnings.
We believe our ability to identify companies run by prudent long-term oriented managers who recognize earnings as the lifeblood of their future growth has helped many of our clients achieve and surpass their goals. Our focus on high quality companies with dependable earnings may result in underperformance when speculative frenzies occur in financial markets around the world. This year, investors’ excitement about the promise of artificial intelligence has driven the prices of a narrow set of stocks to stratospheric levels, including the prices of some companies that lose billions of dollars a year. Semiconductor stocks account for more than two-thirds of the S&P 500 year-to-date return, and 18 stocks produced the index’s entire return. Momentum in these speculative investments inevitably ends and inflicts punishing losses on owners of all stocks. Serious loss, which is a decline in a stock price with no prospect of recovery, can be mitigated by owning shares in truly sound companies whose prudent, disciplined, and experienced managers have positioned their companies to weather market downturns. Providing protection in down markets results in better long-term returns because these stock prices recover faster and resume compounding sooner.
DIGITAL REFRESH
We are pleased to announce that Capital Counsel’s refreshed public website was published earlier this week. The website was updated to better communicate information about our firm, our values and our services. It provides an improved overview of our investment philosophy and strategy which we have honed for nearly three decades.
CAPITAL COUNSEL NEWS
Capital Counsel welcomed three new employees since our last Newsletter was distributed in November 2024. Kate Spencer joined the client service team in September 2025. Harrison Vivas joined the firm as an analyst in March 2026. Fernanda Standora joined Capital Counsel in April 2026 and will support the firm’s trade operations.
Please contact us to complete your 2026 required minimum IRA distributions. The maximum annual qualified charitable distribution (QCD) for 2026 is $111,000, up from $108,000 in 2025. Qualified Charitable Distributions are a tax-advantaged way to satisfy the RMD requirement while supporting your philanthropic goals.
Justin, Sam, Chantalle and Matt each welcomed a new baby since our last newsletter!
ABOUT CAPITAL COUNSEL
Founded in 1999, we are an independently-owned investment management and advisory firm based in New York City. We manage concentrated portfolios of large-cap and mid-cap companies based in the U.S., or those with large U.S. operations. We choose these stocks from ideas generated through the investment team’s in-depth, bottom-up research efforts. Our disciplined investment process requires us to focus on how management teams run their company. Our clients include high-net-worth individuals, multi-generational families, and their trusts and foundations. Many built their wealth through ownership in successful businesses. Some are former executives of companies owned in client portfolios, who have become clients because they understand and respect our investment process.
Capital Counsel’s investment strategy combines disciplined fundamental analysis with patient execution. Stock selection is at the core of our investment strategy. We seek to invest in profitable well-managed companies that generate recurring free cash flow. These companies possess strong balance sheets and earn attractive rates of return on shareholders’ capital. We know the companies and their proven, execution focused management teams well. They deal with problems openly and effectively, and have incentives aligned with shareholders. We evaluate the company, as an informed private buyer might, to determine the value of the business based upon its ability to generate free cash flow. We manage concentrated portfolios which have provided our clients with good long-term results. Since our inception we have cumulatiely outperformed the S&P 500 with reduced risk.
Contact Us
Capital Counsel LLC
527 Madison Avenue,
19th Floor New York, NY 10022
212-350-9333
info@capcounsel.com
www.capitalcounsel.com
Disclosures
Past performance is not indicative of future results. Different types of investments involve varying degrees of risk. All information provided herein is for informational purposes only and should not be interpreted as an offer or provision of investment advice, a recommendation to buy or sell specific securities, or a substitute for personalized advice from Capital Counsel. Capital Counsel does not offer tax or legal advice; readers should not consider the contents of this newsletter as legal or tax advice and should consult their own legal and tax professionals. The information contained herein represents the views of Capital Counsel at a specific point in time, which are subject to change as market conditions, legal requirements, and information available to us evolves. Where market and index data are presented, they have been obtained from FactSet Research Systems, unless otherwise noted. Capital Counsel assumes no responsibility for the accuracy of this data. A full discussion of Capital Counsel’s advisory services and fees is available in our Form ADV Part 2 brochure, which is available upon request, or on our website here capitalcounsel.com/Form-ADV.
Additional Insights
Broker-Dealers (BDs) must register with the SEC and are regulated by the Financial Industry Regulatory Authority (FINRA). BDs buy and sell securities for their clients or their own account. BDs can earn commissions for each transaction where Registered Investment Advisors usually charge a fee on the assets managed. BDs are required to make suitable recommendations based on their clients’ risk tolerance and investment experience. Unlike Capital Counsel, they often hold client assets in brokerage accounts which are not necessarily segregated from the BDs’ other assets. Capital Counsel’s client assets are held by independent custody banks.
Yes. Capital Counsel is a registered investment adviser and is regulated by the U.S. Securities & Exchange Commission under the Investment Advisers Act of 1940.
Capital Counsel, founded in 1999, is an independent investment management firm based in New York City. Terence Greene and Lauren Blum are investment managers who have worked together at Capital Counsel since the inception of the firm in 1999. Justin Berrie joined the team in 2009 and became an owner in the firm in 2015. In 2020, Samuel Magid and Matthew Friedman also became owners in the firm. This continuity in leadership has strengthened our intellectual rigor and investment discipline, greatly benefiting our clients.
We are dedicated to helping our clients achieve their personal and financial goals by investing in consistently great companies and providing thoughtful, long-term guidance.
Yes. We invest our assets, including the firm’s profit sharing plan, alongside those of our clients.
No, Capital Counsel is a fee‐only Registered Investment Adviser. Our interests and incentives are aligned with our clients and we receive fees based on the market value of the assets we manage for our clients.
No. Our clients primarily hold their assets at independent custody banks such as Bank of New York Mellon, an industry leader in custody and securities processing. We help clients open accounts at the custodial firm(s) by providing clients with the necessary paperwork and then working with the custodian to ensure a complete and efficient transfer of the assets. The account is established under the client’s name, who maintains full ownership of the assets at these institutions.
