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In This Issue
bullet Cale's Notes: The Meeting and Retz
bullet About the Tarpon Folio: More on my Spoke Fund®

Letter to Investors

Q2 2013 [email protected] (305) 522-1333

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Cale's Notes
Dear Investors,

On May 18th, we held the fourth IIM Annual Investor Meeting here in Islamorada. For this quarter's letter I recorded a voiceover of the same slideshow I presented at the annual meeting. You can view those slides here:

Annual Meeting Presentation

And if you weren’t at the meeting, there is some big news in those first few slides in particular - specifically, a new portfolio manager has joined Islamorada Investment Management.

I'm thrilled to announce that Lauretta "Retz" Reeves, CFA, has joined IIM. And on July 1st, Retz launched her very own Spoke Fund®, the Frigate Folio.

That's "Frigate" as in the majestic, ocean-traveling bird, people. Retz has long specialized in investing in international equities, and as you might imagine has traveled the world extensively. So there's actually a good metaphor behind the name of her Spoke Fund® – as opposed to, say, just picking the name of a big cool fish nearby.

By way of introduction, I'll start by telling you that for the last sixteen and a half years, Retz was the Co-Chief Investment Officer of Hansberger Global Investors in Ft. Lauderdale. At HGI, Retz served as portfolio manager for a $700 million dollar mutual fund specializing in international value stocks. Prior to HGI, Lauretta worked for the legendary Sir John Templeton at Franklin Templeton Investments, where she managed more than $1 billion in assets. She is a CFA charterholder and also holds the Accredited Wealth Management Advisor, or AWMA, designation. And yes, Retz lives right here in Islamorada, too - although you've probably rarely seen her at Winn-Dixie. For years she has been commuting back and forth to HGI in Ft. Lauderdale. By, you know, car. Where they expected her to wear socks every day. Criminal, no?

Frigate is an international capital appreciation portfolio. So while I'm focused on U.S. companies in Tarpon and Gecko, Retz will be scouring the rest of the globe for her ideas in Frigate.

I think you'll be excited about Retz joining IIM for a number of reasons.

First, she adds a slightly different flavor of value investing to IIM. It's no secret that I consider myself a Warren Buffett groupie. Retz, however, grew up in the business working directly for John Templeton, a pioneer of global investing and the same man that Money magazine in 1999 deemed "arguably the greatest global stock picker of the century." So, you've now got both Buffett and Templeton philosophies working for you here.

Second, now you can invest in international companies at IIM - via a transparent, low-fee portfolio managed by a veteran international investor with plenty of her own skin in the game.

Now, a traditional financial advisor would probably encourage you to invest in international stocks by, say, citing the benefits of wide diversification. I, however, probably have as much credibility discussing widely diversified portfolios as I do in advising Lebron on how to dunk. So I tend to think about international stocks a bit differently. At a high level, I'd summarize those thoughts like this:

It's chaos out there.

Europe has been a transcontinental mess. Japan has been depressed longer than Eeyore. China is either building movie sets like crazy, or it actually has cities now full of empty homes. Just when you thought politics in the Middle East couldn’t get any more impenetrable, along comes an overthrow of last year's overthrow-er in Egypt. And shoot, just last week I saw that Guy Fawkes fella on the news again down in Brazil.

Everywhere you turn it seems there is tear gas, angst, and lots of unintelligible yelling. And you know what that means.

There. Are. Bargains. Everywhere!

I don't think you should invest internationally just because an adviser told you to spread your bets. I think you should consider it because history has shown that "buying when there is blood in the streets" like there is right now is Step #1 on the How To Make a Lot of Moolah flowchart. And if you've ever thought about investing overseas, now's the time to get to know Lauretta.

Lastly, I think you all will be excited about Lauretta joining IIM because she is the first former mutual fund manager to make the jump to managing a Spoke Fund®. And that, of course, makes all of you the smartest, most stylish investors around. Well, 'stylish' is probably not the right word there, what with the flip-flops and cargo shorts, but you know what I mean.

You'll be hearing much more about both Lauretta and Frigate over the coming months. In the meantime, if you're interested in learning more about international investing, the Frigate Folio, or if you just want to say a quick hello to Retz, you can email her anytime at [email protected].

Here’s the link again for those annual meeting videos:

Annual Meeting Presentation

And thank you for investing with IIM.

- Cale

About The Tarpon Folio

The Tarpon Folio is an innovative, investor-friendly alternative to the traditional actively managed mutual fund. It's built on a model we call a Spoke Fund®.

Spoke Fund® is a group of separate investor accounts linked to a portfolio containing a significant portion of the net worth of the portfolio manager. Cale Smith at IIM is the creator and owner of this trademarked and proprietary approach to better transparency and integrity in investing other people’s money.

Fees for Tarpon are 1.25% of assets annually, assessed on a monthly basis. Turnover, taxes and trading are minimized in the fund, which uses a long-term value investing strategy.

For more information, visit our website.

Here is our privacy policy, our Form ADV and our Fiduciary Oath.


See our performance disclaimer for more. Any historical performance data contained above represent performance results as reported by the portfolio listed. The performance results are for illustration purposes only. Historical results are not indicative of future performance. Positive returns are not guaranteed.

Individual results will vary depending on market conditions and investing may cause capital loss. The S&P 500, used for comparison purposes, is significantly less volatile than the holdings of the funds listed. The performance data is net of all fees reflecting the deduction of advisory fees, brokerage commissions and any other client paid expenses. The performance data includes the reinvestment of capital gains.

The publication of this performance data is in no way a solicitation or offer to sell securities or investment advisory services.

© Islamorada Investment Management. All rights reserved.

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