Opportunistic Strategy
Investment Philosophy
The manager is a generalist investor and believes broad knowledge of various markets can help identify some of the best investment opportunities. There is a plethora of investment securities and half the battle to successful investing is being knowledgeable about what is available. Each day is a chance to learn about new companies and improve economic analysis. Screening techniques are use to identify a narrow list of potential investments. Securities are selected by researching company filings and reports, industry reports and performing various valuation approaches such as
discounted cash flow analysis.
discounted cash flow analysis.
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Strategy Objective
The strategy is designed to provide a differentiated investment approach that targets above average returns over time.
The strategy has a custom benchmark with these weightings:
45% Russell 3000 Index
15% S&P 500 Buy Write Index
20% FTSE All World ex US Net Tax
20% Bloomberg Barclays Corporate High Yield Total Return Index Unhedged
The strategy has a custom benchmark with these weightings:
45% Russell 3000 Index
15% S&P 500 Buy Write Index
20% FTSE All World ex US Net Tax
20% Bloomberg Barclays Corporate High Yield Total Return Index Unhedged
Strategy Characteristics
This strategy will invest almost entirely in individual securities. Management is searching for securities with a strong long-term risk vs. reward profile albeit at the expense of possibly greater short-term volatility. The manager has flexibility to invest
in a wide variety of equity, debt and option securities.
The manager has the flexibility to keep large portions of the portfolio value in cash. There is no limit to the percentage of the portfolio that can be invested in cash. If management believes the valuations of securities analyzed are not appealing,
a larger than usual cash position will be maintained.
The percentage of securities invested in equity and fixed income will vary over time based on the best risk adjusted return expectations. The number of equity securities held by the strategy will be below 100 and the expectation is the number of securities will be closer to 50. Large cap, small cap and foreign securities will be included in the strategy. Security selection will likely include broad diversification among sectors.
Fixed income will mostly consist of credit sensitive debt. The manager has the ability to invest in securities
that may benefit more from an interest rate move than improving credit.
Turnover may be minimal at times or could be high at other times.
It will all depend on the opportunities that the securities markets are presenting.
in a wide variety of equity, debt and option securities.
The manager has the flexibility to keep large portions of the portfolio value in cash. There is no limit to the percentage of the portfolio that can be invested in cash. If management believes the valuations of securities analyzed are not appealing,
a larger than usual cash position will be maintained.
The percentage of securities invested in equity and fixed income will vary over time based on the best risk adjusted return expectations. The number of equity securities held by the strategy will be below 100 and the expectation is the number of securities will be closer to 50. Large cap, small cap and foreign securities will be included in the strategy. Security selection will likely include broad diversification among sectors.
Fixed income will mostly consist of credit sensitive debt. The manager has the ability to invest in securities
that may benefit more from an interest rate move than improving credit.
Turnover may be minimal at times or could be high at other times.
It will all depend on the opportunities that the securities markets are presenting.
Strategy Process
The Opportunistic Strategy uses both bottom up fundamental research and top down economic analysis to select securities. A preliminary step is to screen for securities that possess established criteria. Securities that pass screening are then thoroughly researched. SEC filings, company reports, transcripts and industry research are all utilized to decipher if a security would be a good fit for the strategy. In addition, economic analysis is performed to provide an expectation of where economic growth and interest rates may be heading. Growth and interest rate expectations are incorporated into security selection.
The ultimate question to be answered is can this security provide a strong risk-adjusted return over the next 2 to 3 years? This process may lead to stocks selected with strong growth prospects trading at high earnings multiples and it may lead to depressed stocks trading at deep value levels whose business is reliant on a turnaround.
All securities are monitored for changing business dynamics and changing valuations. Notes on reason for inclusion, any material changes in valuation or business environment are kept.
The ultimate question to be answered is can this security provide a strong risk-adjusted return over the next 2 to 3 years? This process may lead to stocks selected with strong growth prospects trading at high earnings multiples and it may lead to depressed stocks trading at deep value levels whose business is reliant on a turnaround.
All securities are monitored for changing business dynamics and changing valuations. Notes on reason for inclusion, any material changes in valuation or business environment are kept.
*The investment(s) discussed may not be suitable for all investors. Investors should make investment decisions based on their own specific investment objectives and financial circumstances.
**Additional information is available upon request.
***Any investment contains risk, including the risk of total loss, fluctuating prices and uncertain returns.
**Additional information is available upon request.
***Any investment contains risk, including the risk of total loss, fluctuating prices and uncertain returns.