Investment Objectives

• To achieve annualized absolute returns of 12 percent.
  
  
• To avoid the permanent impairment of capital.
  
  
• To have lower portfolio volatility than the S&P 500 Index.
  
  
• To seek tax efficiency for investors through long-term capital gains.

Investment Strategies

We are equity value investors with a deep understanding of historical stock-market cycles, and future potential returns from the equity market.  We seek to use a combination of investment approaches in order to achieve consistent returns.  The portfolio is normally net long, and we will often hold a significant cash position. We monitor changes in the yield curve, and changes in the money supply, and the charts of stock Indices for indications of increasing risk in the equity market.

• Directional—generally a bullish posture:  Here we apply our multi-factor model to S&P 1500 Index stocks, and to the individual sub-sets of this universe, most often the S&P 500 Index. 
  
  
  • Identify under-valued securities not generated by our multi-factor model.
    
    
  • We may use options alone (or with the common stock security) to enhance return, manage risk, and reduce volatility.
    
    
• Non-directional—range bound posture:  Here we would use options in spread trading, or sell out-of-money options on individual securities, market indices, or ETFs to capture time decay.
  
  
• Market-neutral—agnostic to market direction:  In the past, we have found arbitrage opportunities using options and the underlying security to capture a profit because of the mispricing of put options.
  
  
• Active portfolio and risk management.