Strategy

Our “Core Strategy”, offered under the trade name Rational Investors, invests in a limited number of long-equity positions, seeking to achieve long-term, double-digit returns over a market cycle while minimizing the risk of permanent loss of capital. Rational Investors invests primarily in two types of stocks–Generals & Special Situations–with an emphasis on Cloning, Cannibals and Spinoffs.  More information is available at RationalInvestors.com.

We also manage customized, absolute-return portfolios, investing long or short and across multiple asset classes, with the mission of delivering superior long-term risk-adjusted returns to each client. We focus primarily on investing in a limited number of generally undervalued and special situation opportunities. On occasion, we may employ activist investing strategies, which may involve more active participation in the affairs of a portfolio company than that generally assumed by an investor.

Portfolios of our CORE STRATEGY are constructed within the following framework:

  • Long only U.S. listed equities
  • Typically 10-15 positions
  • Typically 8-12% position sizes
  • Max position size 12% of portfolio value (at the time an investment is made)
  • No sector or market cap restrictions
  • Above average, long-term absolute return target
  • No leverage
  • No shorting
  • No options
  • Hedging: holding cash as necessary

We strongly discourage prospective clients from investing capital that cannot be committed for at least three years and ideally five years.