TMFBane wanted us to "cut and paste" our 1 page strategies so here goes:Objective: Generate superior long-term returns on both an absolute and relative basis. Goal: Exceed the S&P 500 index by >5% per annum over rolling five year periods. Strategy: Long-biased opportunistic concentrated value oriented fund.Methodology: We are in the business of purchasing securities at a discount to their intrinsic value and selling when they have reached fair value or when we find a more attractive position or realize that we made an error. A purchase of an undervalued security with a known catalyst is preferable to a more undervalued security with no known catalyst. No attempt is made to time the market; however, market hedges will be used to profit from uncertainty. Portfolio: We take concentrated positions in our best ideas typically investing in 8-20 stocks. Initial long positions are 3-5% of portfolio with additions >1%. Short positions or market puts are not to exceed 50% of portfolio assets (market neutral); typically 10-25%. No position will represent more than 33% of the fund’s assets. Risk: We define risk as a permanent impairment of capital and are not distracted by short-term market price fluctuations. Market volatility serves up fat pitches and is not a determinant of risk. Do to our concentrated holding you can expect volatile quarter to quarter performance. We expect lumpy out-performance. Risk is mitigated by making purchases with a significant margin of safety and by focusing our attention on downside risk. Though the fund will typically be long-biased, a fair amount of the fund’s assets may be in market hedges. Our most bearish position will be at least market neutral. Any and all feedback is appreciated!
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