We believe that successful investing requires a unique blend of ideas and attributes that are rarely held by the majority of investment managers. We maintain five beliefs that are critical to successfully managing an investment portfolio:
1. Be Honest
In the book of Proverbs, Chapter 6, verses 16 - 19, King Solomon, one of the wisest men to ever live writes the following:
"These six things the Lord hates, yes, seven are an abomination to Him."
One of the six and two of the seven are being dishonest so we figure it best, above all else, is to just tell the truth. It is not always easy in our business, but we strive to do it. Over the course of our firm's history, we have enjoyed periods of fantastic performance, and we have also had spells of prolonged losses. In order to prevent such spells, we developed a systematic trading system, that we fully implemented in May of 2019. We believe this system will allow us to generate positive returns for our clients in nearly all market environments.
2. Be Different
All great investors have the capacity to invest contrary to popular sentiment. Jim Rogers writes in his best-selling book, Hot Commodities, "Nearly every time I strayed from the heard, I've made alot of money." And Warren Buffett writes in his autobiography, The Essential Buffett, that "if you join the crowd, you have a much higher risk of being trampled."
Most firms tout themselves as "different", but are all virtually the same. We, however, deviate significantly from the norm by providing absolute return strategies in separate accounts to all investors.
3. Be Prudent
Every discretionary position we build for our clients comes with a stop-loss price. Some call this "risk management", but we know it as "loss management". Every investor knows losses are inevitable. It is not avoiding losses that count—it is minimizing them when they do occur.
4. Absolute Returns Promote Wealth Preservation
A sign in my high school basketball locker room said, "Offense Wins Games - Defense Wins Championships." As an investment manager, I believe this holds true for investing as much as it does sports.
Absolute return investment strategies seek to deliver positive returns regardless of market direction. Our primary objective is to help investors preserve wealth and our second is to grow that wealth.
5. Technical Analysis Works
Dr. Ken McFarland famously said, "It’s impossible to predict the behavior of a single individual; however, it is easy to predict the behavior of a group of individuals." We share his sentiment when it comes to capital markets. It is impossible to determine how an individual investor will behave, but there are certainly repetitive patterns across groups of investors. Investors collectively behave in fairly predictable ways, and there are quantifiable methods to measure historical market behavior useful in determining future market trends. We have developed our own proprietary tools that measure investor groupthink, allowing us to generate positive returns in nearly all market climates.