Investment Adviser

Analytic Investment

Investment Advisor,Analytic Investment

Education University of Southern California; NTHU, Taiwan
Qualifications MS Computer Engineering, BSEE/BSPME
Investment Experience 6 years
Founded 2007

Focus Value

Exceptions
Sell Discipline
Allocation Discipline
Research
Approach
Summary

Seeks to capture equity mispricing opportunities due to market inefficiency, by continuously computing relative valuation of all stocks according to fundamental factors such as earning and sales ratios, cash flow, enterprise value, and debt to equity.

Contrary to buy-and-hold strategies that put investment capital on the same stocks over multi-year period, the model's computer algorithms constantly look for better opportunities to reuse current investment capital to buy undervalued stocks by selling existing overvalued stocks partially or in full. The computer algorithms ensure the same investment capital work harder to participate stock mispricing opportunities.

The model uses proprietary computer algorithms with the goals to maximize gains and minimize risks. With computer algorithms, exposure to risk is actively managed, human emotion and buy-sell bias are eliminated from the equity investing process, unnecessary market timing is avoided, and continuous participation of market is possible for long-term growth.

This is not a diversified portfolio. It typically holds 15 to 20 stocks with an annual portfolio turnover rate of about 600%. Individual stock weightings in the portfolio are calculated based on appreciation potential and may change frequently.

Positions are sold or reduced when stocks become more expensive relative to other stocks based on above valuation factors, and are replaced with stocks of cheaper valuations.

None.

Replicability

93.4%

6.6%

Replicable
Non-replicable

Top 5 Holdings View all

10.1%

7.4%

6.6%

6.2%

6.0%

LLEN
REGI
PCMI
Cash
HIMX

Model commentary

I expect stocks to push higher this summer

10 April 2013

After a pause in April, the market will head higher.
OfficeMax shares poised to grow following merger with Office Depot 20 February 2013
Constellation Brands: How we played its wild trading swing 20 February 2013
We dumped Apple before the sell-off and are now buying it again 15 February 2013
How we outperformed the indexes in 2012 13 January 2013

Performance detail

Manager
Russell 2000
S&P 500

30D 90D 365D SI

Performance

Inception August 25, 2010

as of May 22, 2013	Manager	Russell 2000	S&P 500	Average Subscriber
Past 30 days	8.7%	7.4%	5.9%	8.1%
Past 90 days	19.8%	8.5%	10.2%	17.2%
Past 365 days	67.3%	29.3%	25.7%	51.3%
Since Inception (Annualized)	40.3%	19.3%	17.8%	-
2013 (YTD)	28.0%	15.6%	16.1%	23.6%
2012	55.1%	14.6%	13.4%	37.1%
2011	-14.0%	-5.5%	-0.0%	-21.9%

Risk Metrics

Last 365 days

as of May 22, 2013	Manager	Russell 2000	S&P 500
Best 30 days	18.4%	11.0%	8.2%
Worst 30 days	-8.7%	-7.9%	-7.0%
Volatility	22.1%	16.3%	12.7%
Sharpe Ratio	3.04	1.79	2.02
Sortino Ratio	4.30	2.45	2.91
Maximum Drawdown	-11.5%	-11.0%	-7.7%
Value-at-risk (95%, 1 week)	-5.1%	-3.8%	-2.9%

	vs. Russell 2000	vs. S&P 500
Information Ratio	2.40	2.46
Alpha	28.5%	27.3%
Beta	0.95	1.13
R-Squared	0.49	0.42

Analytic Investment's other strategies

Latest transactions view all

Average trades per month 17.3

Executed	Symbol	Security	Replicable	Type	Price
05/20/13	LLEN	L&L ENERGY INC		Buy	$4.03
05/20/13	XRM	XERIUM TECHNOLOGIES INC		Buy	$9.19
05/20/13	PCMI	PCM INC		Buy	$7.74
05/20/13	AIQ	ALLIANCE HEALTHCARE SERVICE		Buy	$12.50
05/20/13	GTN	GRAY TELEVISION INC		Sell	$5.91
05/20/13	GPRE	GREEN PLAINS RENEWABLE ENERG		Sell	$15.57
05/20/13	TA	TRAVELCENTERS OF AMERICA LLC		Sell	$11.22
05/20/13	DCO	DUCOMMUN INC		Sell	$18.58

Important Information

1. Past performance is no guarantee of future results.

2. Performance of the model manager's account is calculated by Covestor on a daily time-weighted basis, including cash, dividends and earnings distributions, and broker commissions. Manager returns include trades that fail Covestor's trading rules, do not reflect any Covestor suitability or risk score restrictions and are exclusive of Covestor fees. More

3. Average subscription returns ("Avg Sub" or "Avg Client") are calculated by Covestor and are composed of the average, daily, time weighted returns of all active subscriptions to the underlying model. These daily average returns are then linked together for the timeframe requested. In addition, these returns include cash, dividends and earnings distributions, brokerage commissions, Covestor advisory fees, and reflect individual client suitability and risk score restrictions. More

4. All graph data is as of the end of day for the referenced period, unless otherwise specified. The subscription minimum is the minimum subscription required to follow a particular model. The minimum amount is determined by Covestor, based on the characteristics of the underlying model. It should not be considered as specific investment advice for your investment situation.

5. The performance charts are provided for informational purposes only, and should not be used as the basis for making an investment decision. Variables such as corporate actions or foreign exchange may affect daily performance displays. We rely on mathematical formulas, computer programs, and pricing information from third-party vendors to provide these returns. Neither Covestor nor any of its data or content providers shall be liable for any errors in this information or any actions taken by you in reliance upon this information.

6. Benchmark returns have been calculated by Covestor using a time-weighted calculation of daily index valuations and do not include cash, dividends and earnings distributions, or transaction costs. More

7. Leverage indicates the level of margin utilized and is calculated by dividing gross exposure by portfolio net liquidation value.

8. All Model Manager information including personal data, profiles, strategies, monthly investment reports, and historical results outside of Covestor has been provided by the Model Manager. Covestor makes no representation or warranty of its accuracy, completeness or relevance and it does not represent the opinions of Covestor. Transaction history is available upon request. Model classifications (Approach, Asset Class) are provided by Covestor, and are intended to serve as a general guide.

9. Top Replicable Holdings: These securities are currently held in the model manager's brokerage account. Those marked as "Replicable Holdings" currently pass Covestor's trading rules, subject to individual client constraints. Eligibility for replication may change over time. Actual client subscription holdings may vary.

10. Latest Transactions: These transactions were executed in the model manager's brokerage account. Those marked as "Replicable" () passed Covestor's trading rules and were eligible for replication at the time of execution, subject to individual client constraints. Eligibility for replication may change over time. Actual client subscription trade activity may vary.

11. S&P 500 Index is an unmanaged index compiled by Standard & Poor´s Corp. Index returns do not reflect any management fees, transaction costs or expenses. Individuals cannot invest directly in an Index. S&P 500 index data: S&P/Dow Jones Indices LLC, a subsidiary of The McGraw-Hill Companies Copyright © 2013.

Analytic Investment