Hi, guys.
Sorry about the delayed reminder. We posted the September issue on the evening of September 1st, then I surrendered to a slightly chaotic weekend. Stuff that might be worth looking at:
my opening letter had two tracks. The first reported back word from some of the mutual funds headquartered in Houston and shared their reflections on how best to help. The second continued our long-term project of reminding folks that the best time to get ready is before the storm, financial or otherwise. This installment reminds folks during the next serious downdraft, whenever it comes, they're going to be seeing panicked headlines on the theme of "Dow down 2000 points! Worst drop in all human history! Might signal imminent Dark Ages or release of the kraken or something."
Ed has had a chance to read and reflect on a book by Joel Tillinghast, manager-for-life of Fidelity Low-Priced Stock (FLPSX). He came into the exercise half expecting it to be another exercise in leaden writing and investing banality, and left impressed with both the writing and the insights.
Charles spent some time quantifying the magnitude of the market's calm, and the distortions it is introducing in our risk-return calculus.
Centerstone Investors (CENTX) launched just over a year ago with the manager and the discipline that drove First Eagle Global (SGENX, originally SoGen International after its first adviser, Societie Generale) to substantial and persistent outperformance despite $60 billion in AUM. Year One went okay, with CENTX matching the performance of SGENX and drawing substantial assets. I wonder a bit about the business model ("C" shares? No "Investor" or "Advisor"? No easy prospects for "A" share waivers?) but the investment model is unquestionably a winner.
Driehaus Small Cap Growth (DVSMX) launched last month. It was formed by the merger of several small small-cap hedge funds that nominally follow the same strategy despite rather divergent names. Driehaus is mostly pretty serious about the "growth" part of "growth investing," which leads itself to high return, high-vol investing. You might look at their Micro Cap Growth Fund (DMCRX) as a model; same managers, top 2% returns in its first three years, standard deviation about 30% higher than its peers, beta of 1.15.
And the Turner Funds? What can I say. They're one of a kind. Or, perhaps, one of 30 kinds if you count all of the funds launched and liquidated so far.
Four really promising funds in registration. One sort of sad note about the closing of Holland Capital. A bunch of echoes of announcements that Shadow had previously made here. Stuff, really.
David
