INVESTMENT STRATEGY

Our Market Anomaly Program (The MAP)

Our MAP Strategy is a style-agnostic, absolute return strategy that seeks low-risk opportunities by utilizing our proprietary algorithm.  In layman's terms, the strategy's objective is to generate profits for our clients regardless of what the stock market or interest rates are doing.   Our multi-strat approach is unrestrained and can go anywhere, anytime to find securities at attractive prices.    In addition, we have considerable exposure to inflation themes thus hedging increases in your cost of living.  

When implementing our strategy, we abide by 4 steadfast rules that dictate everything we do in our clients' accounts:

  • Rule #1:  Don't Lose Money:  We have stop-loss exits on every single position.
  • Rule #2:  Buy Low:  Our algorithm specializes in identifying moments of capitulation.
  • Rule #3:  Sell High:  Our model excels at taking profits so we can readily compound gains for you.  
  • Rule #4:  To quote Jim Rogers, "When there is a pile of money sitting in the corner, go pick it up."

You can read more about our approach on our Investment Philosophy page.  Ultimately, the results speak for themselves.  Below are performance specifics for our strategy.  We measure our success by the three "P's":  Protect, Participate and Perform.  We would appreciate the opportunity to discuss our strategy with you and see how it may fit into your portfolio.  You can fill out the Contact Us form below or call our office at 512 | 553-5151.   

MAP Performance

Protect

We measure a funds ability to protect on the downside by comparing various downside specific risk measures. First, and perhaps most important, is largest drawdown. We also look at downside deviation and downside beta, both of which are measured relative to the S&P 500. These guages provide an investor with a material expectation of how the fund should perform if the broad market declines.
Statistic1 Year3 Years5 Years
Max Drawdown-11.49%-11.49%NA
Recovery Time314 days314 daysNA
Downside Deviation5.96%4.75%NA
Downside Beta0.070.12NA

Participate

Beta is a widely used calculation to determine how correlated a security is to the S&P 500. We also look to the Treynor Ratio to measure upside alpha plus we integrate upside beta. Upside Beta measures how well a fund participates when the market is going up.
Statistic1 Year3 Years5 Years
Beta0.180.28NA
Treynor Ratio16.30%41.88%NA
Standard Deviation10.93%10.68%NA
Upside Beta-0.230.29NA

Perform

We measure relative performance by simply comparing annual returns relative to our benchmarks. To measure absolute performance, we use the well-known Sharpe ratio but prefer risk-adjusted ratios such as Jenson's Alpha and our own proprietary tool, Mac's Alpha. Ultimately, performance is the most critical variable in fund selection so we takea much deeper dive into this measure.
Statistic1 Year3 Years5 Years
Annual Returns2.91%11.63%NA
Jensen's Alpha2.91%7.81%NA
Sharpe Ratio0.271.09NA
Sortino Ratio0.492.45NA

Comparison

Returns
Ulcer impact
StatisticMAPSAVBINX AOM
Value Per 10K$13,909$12,630$11,228
Total Returns39.09%26.30%12.28%
Annual Returns11.63%8.09%3.94%
Standard Deviation 10.68%12.23%8.29%
Downside Deviation 4.75%8.08%5.84%
Max Drawdown -11.49%-22.78%-16.90%
Recovery Time 314 days152 days152 days
Ulcer Index 4.26%4.36%3.39%
Sharpe Ratio 1.090.660.47
Sortino Ratio 2.451.000.67
Ulcer Perf. Index 2.731.861.16
Beta 0.280.650.42
Downside Beta 0.120.720.50
Treynor Ratio 0.420.130.09
Jensen's Alpha 7.81%-0.80%-1.86%
Mac's Alpha 9.97%-1.79%-3.00%

The following is additional information on our MAP strategy:

  • Our strategy is implemented in a separately managed account, owned and controlled by our clients.  
  • There is no lock-up period or penalty of any kind for terminating our strategy.  
  • Our universe of securities includes over 100 names, the majority of which are components of the S&P 500.  In addition, we have numerous alternative securities and international names for the purpose of diversification.  
  • Typically, we only have exposure at any given time to a handful of names in our security universe.  Our average exposure is between 10 to 15 positions.  Our market exposure will vary significantly. 
  • Our strategy is nearly 100% mechanical with very little subjectively factoring into trading decisions.
  • We have a target percentage loss for every position in our clients' accounts so that no single position is going to sink our strategy.     
  • Our system takes a proactive approach to taking profits.   We use a methodology for creating trailing stops which means we are consistently compounding gains for our clients' benefit.  
  • We serve all our clients as a fee-only fiduciary, so, the better you do, the better we do.   

Market Anomaly Program Separately Managed Account

We would appreciate the opportunity to discuss how our MAP absolute return strategy can serve as way to diversify your investment portfolio in addition to hedging inflation and higher interest rates.

We are a fee-only investment adviser serving all our clients as a fiduciary. The better you do, the better we do.

To talk to one of our analysts, fill out the form and we’ll contact you at our earliest availability or you can call our office directly at 830 | 460 2050