Prudent Value Wtih Options concentrates assets in its best ideas (subject to reasonable diversification) and generally maintains its investment positions for extended periods of time.
We do not believe we are smarter than the market, nor can we time the market in any given week or month. As a result, we take an approach similar to an insurance company in our investment strategy that focuses on probability of success and the management of risk.
All investments entail risk. Loss events do occur. However, there is an undeniable characteristic of investors (humans). We have an overwhelming fear of large loss and that translates into overpaying for “insurance”. Horse Cove makes money because at its core, that “insurance” is over-priced. There is a difference between implied volatility in the pricing of an option and the realized volatility at expiration. That difference cannot be arbitraged away. Horse Cove Partners profits by selling implied volatility and profits when realized volatility is less than implied as time decays.
As advisers, we understand that events will occur. “When” they will occur is the unknown. One of the keys to success is to take intelligent losses when those events occur and expect that the trading strategy will result in positive performance net of those losses over time.
We believe our success comes from focusing on the risk of each trade. By maintaining a weekly investment horizon and relying on over 60 years of history of market movement we believe it is possible to realize positive returns through option transactions, while maintaining acceptable risk limits.
Our long-term value portfolio invests in the firms that have the competitive advantage in their market segments with the potential to grow for the long term. We hold most of our equities for the long term as long as they are reasonably valued and have ample margin of safety. We focus on capital preservation and consistently look for growth opportunities.
Mott Capital Management is a Thematic Growth investor using themes and trends in society to find exciting growth stories. Once we find a theme we want to capitalize on we begin searching for products that interact with the end user. From there we begin the company search process. Our investment strategy is long-term because that is our edge. We understand and recognize when events are critical and when they are not. We also believe investing long term is a way to neutralize market volatility.
The development of the U.S. shale industry is still infantile, however the potential output from these shale deposits can potentially ease the U.S. reliance on foreign energy and provide a significant amount of jobs to Americans in an economic downturn.
The strategy uses technical trading indicators to actively trade the SPDR S&P 500 (SPY) and the ProShares Short S&P 500 (SH). The strategy is appropriate for investors that are looking to sidestep market downturns, while still participating in the upside.
Studies quarterly and annual reports, looking for companies that have demonstrated the ability to grow sales, earnings, cash flows and book values consistently over multiple economic cycles. Long only and buys across all capitalizations.
Using proprietary computer algorithms, Earning Growth Portfolio buys stocks with the highest upward earning revision and upside earning surprise. Stocks are sold when they have lesser earning revision and earning surprise relative to other growth stocks, and are replaced with stocks of stronger earning revision and earning surprise. This diversified portfolio typically holds at least 50 stocks, is long only, does not use margin, and does not trade leveraged or inverse ETF.
We use a multi-faceted approach. For this particular model, 35% is allocated to a Sector Rotation system (technical analysis based), another 35% to a Calendar system (based on sector seasonality), and the remaining 30% among index strategies that are managed using various types of data and analysis (earnings, inflation, price, linear regression, trend following, volatility, etc). We believe that using multiple strategies adds an important layer of diversification. Our primary aim isn’t necessarily to always outperform a benchmark, but rather to manage risk and achieve consistent returns in all types of markets.
Sera Capital Management’s Financial Tales Portfolio is designed for investors, not speculators. This global tactical strategy invests in a mix of Exchange-Traded Products (ETPs), and seeks to potentially outperform inflation by 5% a year over multiple market cycles. We attempt to achieve that goal while taking on about half the risk of the S&P 500.
The Atlas Global Downside Protected (GDP) strategy is a global equity strategy benchmarked to the MSCI All-Country World Index (ACWI). GDP is designed to reduce the risk of large loss in sustained market declines, while still striving to achieve gains when stock markets are rising. The strategy does this by avoiding segments of global stock markets that have heightened risk profile; staying fully invested in “good markets” (using cash sparingly); and opportunistically managing foreign exchange rate risk. As with the other Atlas strategies, GDP uses a consistent, systematic approach with a foundation in academic and Atlas proprietary research.
GARP stands for Growth at a Reasonable Price. My growth-oriented investment style focuses on fundamental analysis including cash ratios, liquidity ratios and margins. I will also invest in anticipation of potential mergers, spin-offs and perceived arbitrage opportunities.
The Sparrow Capital Fund is a long/short equity portfolio that invests across market sectors, industries, and market capitalization ranges. The Sparrow Capital Fund’s objective is to provide the most efficient risk/reward outcome over time. The strategy is intended to achieve market neutrality.
Cable Car Capital invests globally in public companies. The firm screens public companies using an intensive, fundamental research process that seeks to identify mispriced securities using a value-oriented approach with a multi-year time horizon. Cable Car Capital capitalizes opportunistically on shorter-term or special situation (e.g. spinoffs, reorganizations, merger arbitrage) opportunities while maintaining a concentrated core portfolio of contrarian/out-of-favor but high-quality longs and over-hyped or mismanaged single-name shorts.
For non-U.S. public companies, Cable Car utilizes American Depository Receipts which are called ADRs. These are receipts of shares of foreign companies that trade on the U.S. stock market exchanges.
Patton Absolute Return is a multi-asset class discretionary strategy that aims to produce positive returns in all market environments. The approach is driven by top-down research and a deep understanding of market psychology that seeks to profit from medium-term moves in US stocks & interest rates. On top of its core strategy, Patton overlays additional discretionary option trading strategies to express its market outlook with greater precision and to increase returns by profiting from the volatility risk premium – a known market inefficiency where option prices are systematically overpriced relative to realized volatility.
We focus on US takeover targets or potential takeover targets and use screening guidelines including liquidity, premium and share price. Our focus is current US takeover targets or potential targets.
The Undervalued Opportunities investment strategy is suited for investors who are seeking concentrated exposure to securities. The strategy will seek both investment in securities and short selling. Through active management the strategy strives to beat the annualized returns of the S&P 500 over a long period of time.
The Ivy 5 Downside Protected (Ivy 5) portfolio is a global asset allocation strategy. The Ivy 5 implements a strategy used by the large Ivy League endowments as researched by Faber and Richardson (2009). The five asset classes that the Ivy 5 portfolio invests in are US equities, foreign equities, fixed income, real estate, and commodities. Over this set of assets we layer on quantitative risk management strategies that seek to reduce the volatility and drawdowns of the portfolio. The latest quantitative research is employed to improve the risk-return characteristics of the portfolio.
Hull Capital’s Aggressive Absolute Return strategy is designed for investors looking for growth rates above market index returns while reducing downside risk by avoiding falling or bear markets.
Our Small Cap portfolio seeks to achieve capital appreciation by primarily investing in small companies with above average growth potential. Small companies, according to the manager, are companies whose market capitalizations are generally less than $2 billion at the time of purchase. The manager maintains a concentrated portfolio of small cap companies traded on US exchanges.