Investment Advisor

Fletcher Wealth

Financial Planner,Fletcher Wealth Management

Education East Tenessee State University
Qualifications MBA

Texas-Based

Exceptions
Sell Discipline
Allocation Discipline
Research
Approach
Summary

This strategy aims to provide exposure to US. domestic markets via companies based in one of the most business friendly states: Texas. In addition to having a GDP that dwarfs many countries (The Economist has compared the size of the Texas GOP to that of Russia's - Economist.com), Texas has been highly ranked by Forbes' "The Best States For Business And Careers” (Forbes.com) as well as CNBC’s "America's Top States for Business" (CNBC.com).

We look to capitalize on discounts to fair value, while taking advantage of a large economy and business friendly government.

Adding companies from Texas can help strengthen an investor’s entire portfolio in several ways. They provide overall diversification to U.S. domestic equity given the broad array of industries in Texas. The business results of companies that operate in such a large economy are partially buffered from issues faced by the U.S. economy at large, such as unemployment and tightened credit, because the firms have the size to adjust on a smaller economic scale, but a large enough scale to make a difference. Additionally, operating in a business friendly government environment helps foster growth because of the low tax burden.

A Morningstar screen identifies companies that are based in Texas, traded on United States stock exchanges, and sell at a discount to fair value. Additional research is performed using publicly available information (e.g., financial statements, prospectuses) to determine company strength and stability. Other factors, such as the macroeconomic environment and government regulation, are also considered before a purchase is made.

The model will have up to 10 holdings with each having a weighting of no more than approximately 15% of the model. This model may hold cash as it waits for opportunities.

Selling occurs when a holding hits a predetermined target price, develops problems with its operations, or can be replaced by a more attractively valued holding.

None.

Approach Fundamental
Asset class Equity
Geography US

Replicability

100.0%

Replicable

Top 5 Holdings View all

14.8%

10.4%

9.9%

9.8%

9.7%

DF
ETP
LXRX
ETE
CMC

Model commentary

Hedging the dollar with these core holdings

16 November 2011

The overall market appears to have somewhat stabilized, so we will consider making some purchases over the next few months.
Oil and Gas MLPs remain a safe haven 14 November 2011
Maintaining stability in my Dividends and Yield … 11 November 2011
Staying patient on Oil & Gas MLPs 19 October 2011
Three defensive stocks I like (and own) here 20 September 2011

Performance detail

Manager
S&P 500

30D 90D 365D SI

Performance

Inception July 12, 2011

as of May 15, 2012	Manager	S&P 500	Average Subscriber
Past 30 days	0.9%	-2.9%	-
Past 90 days	-4.8%	-0.9%	-
Since Inception	-12.4%	1.3%	-
2012 (YTD)	0.1%	5.8%	-

Risk Metrics

Since Inception

as of May 15, 2012	Manager	S&P 500
Best 30 days	16.7%	13.6%
Worst 30 days	-21.8%	-16.5%
Volatility	25.8%	24.3%
Sharpe Ratio	-0.58	0.06
Sortino Ratio	-0.77	0.07
Maximum Drawdown	-28.8%	-18.3%
Value-at-risk (95%, 1 week)	-6.0%	-5.6%

	vs. S&P 500
Information Ratio	-1.51
Alpha	-16.6%
Beta	0.96
R-Squared	0.83

Latest transactions view all

Average trades per month 0.9

Executed	Symbol	Security	Replicable	Type	Price
07/20/11	COP	ConocoPhillips		Buy	$75.28
07/20/11	LUV	SOUTHWEST AIRLINES CO		Buy	$10.58
07/20/11	CMC	COMMERCIAL METALS CO		Buy	$14.52
07/15/11	DF	DEAN FOODS CO		Buy	$11.42
07/15/11	ETP	Energy Transfer Partners LP		Buy	$48.11
07/15/11	ETE	ENERGY TRANSFER EQUITY LP		Buy	$44.07
07/13/11	UPL	ULTRA PETROLEUM CORP		Sell	$45.91
07/13/11	LXRX	Lexicon Pharmaceuticals Inc		Buy	$1.75

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$25,000 subscription min
1.5% fee

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. 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

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

7. 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.

8. 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.

9. 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.

10. 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 500 Copyright © 2012.

11. Dow Jones index data: CME Group Index Services, LLC 2012

Background provided by the manager
Fletcher Wealth Form ADV IIA

Fletcher Wealth