About the Tarpon Folio
Long-term capital appreciation for growth investors.
Disclaimer: This performance is highly unusual and cannot be sustained. Because the portfolio contains a limited number of companies, its returns will be more volatile than a portfolio investing in a higher number of stocks. Fund inception date 11/20/2008. Returns above are as of 04/30/10. See our full disclaimer for more.
The Tarpon Folio is managed for long-term growth using value investing
principles. Our portfolio manager Cale Smith has nearly all of his family’s
life savings invested in the Tarpon Folio.
The Tarpon Folio invests in companies that have underappreciated
strengths trading at inexpensive valuations. We are seeking
companies with attractive owner's
earnings, a large margin
of safety and a significant chance for large gains over the long-term. We
pay particular attention to the company's financial fundamentals
and competitive positioning.
We also look for opportunities
among companies experiencing forced selling by their current investors,
which might include spin-offs, low-priced companies, broken IPOs,
and/or companies emerging from bankruptcy.
We do not attempt any economic forecasting in the Folio, nor do
we obsess over short-term results - whether good or bad. We
also do not unnecessarily limit ourselves to specific size companies
nor industries.
We do stick to companies and industries we know and
understand, however, including the consumer discretionary sector,
media and transportation companies, select financial companies, certain
technology subsectors and telecommunications.
Fees are 1.25% of assets on an annual basis
and are assessed quarterly, so fees in dollar terms vary depending
on how well the portfolio performs. Turnover, taxes and trading are
minimized in the fund.
Click here for the Tarpon Folio Brochure.
For the latest on the Tarpon Folio’s performance, please see
our most recent Letter to Investors.
To open an account and invest, click here.
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About the Gecko Folio
High yield for income investors.
Disclaimer: This performance is highly unusual and cannot be sustained. Because the portfolio contains a limited number of stocks and bonds, its returns will be more volatile than a portfolio investing in a higher number of securities. Fund inception date 1/26/2009. Returns above are as of 04/30/10. See our full disclaimer for more.
The Gecko Folio is managed to maximize income as opposed to capital
appreciation. Our portfolio manager Cale Smith also invests his own money in
the Gecko Folio.
The Gecko Folio contains stocks and bonds. More specifically, the
Fund holds a concentrated portfolio of publicly traded oil and gas
pipeline companies called MLPs, or master limited partnerships, and
closed-end bond funds.
Our criteria for equities included in
the Gecko Folio include dependable earnings, a large margin of safety,
a wide moat around the business and a safe, attractive and growing
dividend. Bonds and closed-end bond funds require additional analysis.
The Gecko Folio is built solely for taxable accounts, as opposed to tax-deferred
accounts like an IRA. Owning MLPs in a tax deferred account can create
issues come tax time, so we steer investors away from doing so.
Fees are 1.25% of assets on an annual
basis and are assessed quarterly, so our fees in dollar terms vary
depending on how well the portfolio performs. Turnover, taxes and
trading are minimized in the fund.
Click here for the Gecko Folio Brochure.
To open an account and invest, click here.
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Spoke Funds: A smarter way to invest
We manage two portfolios, the Tarpon Folio and the Gecko Folio. They
are not mutual funds, nor hedge funds. Our portfolios are called “spoke
funds.”
A spoke fund is a group of separate investor accounts linked to
the same exact portfolio of that fund’s manager. Here is a PDF file that compares spoke funds with mutual funds.
The term “spoke fund” is a name we coined which is
short for “hub-and-spoke.”
Imagine a first grader drawing a picture of the solar system. The
sun is the hub – nearly all of the life savings of our portfolio
manager’s family, in this case - and the spokes lead to all
the planets, which are our investors’ accounts. Any trades
in the core portfolio are executed simultaneously through the spokes
through all other accounts. Those accounts are secure, fully insured,
and held by an independent company led by a former commissioner of
the SEC.
In contrast, mutual funds and hedge funds take a “pooled” approach
to managing money, lumping all investors’ money together in
a giant pool. Among numerous problems, including high fees and conflicts
of interest, investors in those kinds of funds also have zero real-time
visibility into what’s going on with their money, and why.
Spoke funds are similar to SMAs, or separately managed accounts, although there are some key differences - most notably the amount of net worth a manager has at stake. Other differences can be found here, too.
A spoke fund is not a fund in the traditional
sense. We think it’s better. When you invest in mutual fund
or hedge fund you’re actually buying shares or interest in
the fund itself. In a spoke fund, you’re buying shares in the
same publicly traded companies that everyone else owns.
Those shares you own are held in a separate account, which means
your portfolio manager has precise control over taxes and costs and
has the ability to run social responsibility screens just for you.
It also means you can vote on corporate issues at the companies you
own.
We don’t know why everyone doesn’t invest this way.
For more on spoke funds, read Why
I Built a Spoke Fund by our founder Cale Smith.
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