How are you different from other financial firms?
The short version: We are an independent fee-only firm. As a Registered Investment Advisor, we were the first true fiduciary investment and planning firm in the Florida Keys. And as a fiduciary firm, we have a moral and legal obligation to put our investors’ interests first. Among other things, that means we are stewards, not salesman, and we get paid as a percent of the assets you invest with us – and never by commission.
What is Islamorada Investment Management?
Islamorada Investment Management (IIM) is an independent registered investment advisor based in the Florida Keys. We invest others’ money alongside our own through five proprietary portfolios – Tarpon Folio, Gecko Folio, Frigate Folio, Treasure Harbor Folio and Yellowtail Folio – that are called Spoke Funds®. We also manage several private accounts for investors whose needs differ from investors in our proprietary portfolios. As a fee-only firm, IIM does not accept any referral fees or compensation that is contingent upon the purchase or sale of a financial product.
Isn’t Islamorada where that Netflix series was filmed?
Yes, indeed. Three seasons of Bloodline were shot right here in town. You can find our Insider’s Guide to Bloodline at this link.
How Can I Contact You?
To schedule an appointment, please call (305) 522-1333 or stop by our office in Islamorada anytime between 10am and 3pm, Monday thru Friday.
Our office is located at mile marker 81.8, bayside, in the same building as Ocean Sotheby’s.
Our address is:
Islamorada Investment Management
81888 Overseas Highway, Suite E
Islamorada, FL 33036
Otherwise you may email us at info (at) islainvest.com and we will respond as soon as possible.
Whose Money Do You Invest?
We currently serve residents of Florida, Texas and California primarily. In certain cases, we also serve clients in other states. Please contact us if you’d like to invest and are located in another state.
Where in the world are you located? And how do I pronounce Islamorada?
Islamorada is in the Florida Keys. The name means “purple isle,” and it’s halfway between Miami and Key West.
The key to pronouncing Islamorada is to know that the “s” is silent.
Once you get good with that, try “conch” and “Lignum Vitae.”
What is the Tarpon Folio?
The Tarpon Folio was our first Spoke Fund® and was launched in November of 2008. Cale Smith, the portfolio manager of the Tarpon Folio, has nearly all of his family’s life savings invested in Tarpon.
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®. It is more transparent, takes more concentrated positions and is significantly less expensive than the vast majority of mutual funds. The portfolio is managed for long-term growth using value investing principles.
Fees are 1.25% per year. Specifics can be found on pages 4 and 5 of our Form ADV Part 2. Turnover, taxes and trading are minimized in the fund, and investors can customize their accounts in several key ways, including tax preference. Each Tarpon Folio account is also protected by three types of insurance for a maximum of up to $9.0 million.
This table also compares the Tarpon Folio with a mutual fund.
What is the Gecko Folio?
We invest alongside our investors in the Gecko Folio, too. It’s also a Spoke Fund® and was launched in January 2009.
In addition to the characteristics above, Gecko is managed to maximize income as opposed to capital appreciation like the Tarpon Folio. Gecko contains both stocks and bonds. Stocks chosen for the fund have similar characteristics to those in Tarpon and include secure and growing dividend yields. Bonds in the Gecko Folio require a few different analyses, too.
What is the Frigate Folio?
The Frigate Folio is an international capital appreciation portfolio managed by Lauretta Reeves, CFA, and launched on July 1, 2013.
The Frigate Folio invests in international stocks via ADRs (American Depository Receipts) or equivalents that are available for purchase on US exchanges or over-the- counter. Stocks selected are perceived to be trading at attractive valuations versus their history and/or their sector and to display strong or improving fundamentals. Current price divided by expected earnings per share (forward p/e ratio) is a key metric, although price to cash-flow, price to book and yield may be considered. To calculate future earnings, the portfolio manager relies on management’s estimates, third-party research and independent investigation.
For more info on Frigate, please contact us.
What is the Treasure Harbor Folio?
The Treasure Harbor Folio is an international income portfolio managed by Lauretta Reeves, CFA, and launched on October 1, 2013.
The Treasure Harbor Folio invests in a concentrated number of international stocks via ADRs (American Depository Receipts) or equivalents that are available for purchase on US exchanges or over-the-counter. Stocks selected are expected to generate dividend yield greater than the broad international indices. Expected dividends are calculated utilizing management’s estimates, third-party research and the portfolio manager’s investigation. The Treasure Harbor Folio is constructed from the bottom-up with country and industry diversification a result of the research process.
For more info on Treasure Harbor, please contact us.
What is the Yellowtail Folio?
The Yellowtail Folio is an international small cap portfolio managed by Lauretta Reeves, CFA, and launched on November 13, 2014.
Yellowtail invests in a concentrated number of international small capitalization stocks via purchase in local country exchanges. Stocks selected are expected to generate greater capital appreciation than comparable international indices. Stocks selected are perceived to be trading at attractive valuations versus their history and/or their sector and to display strong or improving fundamentals. The Yellowtail Folio is constructed from the bottom-up with country and industry diversification a result of the research process.
For more info on Treasure Harbor, please contact us.
What is a Spoke Fund®? Where can I find out more about Spoke Funds?
A Spoke Fund® is a group of separate investor accounts linked to a portfolio containing most of the liquid net worth of that fund’s manager.
“Spoke Fund” is short for “hub and spoke” model. The portfolio manager’s money is the hub and the spokes lead to each investor’s account. Any changes in the hub are simultaneously made in the spoke accounts. Thanks to technology, this can all be done pretty easily. Here is a simple illustration.
Find out more on our blog. Here is the definition of a Spoke Fund®. Here is why Cale built a Spoke Fund® to begin with instead of a hedge fund or mutual fund. And here is more info for other portfolio managers looking to build their own Spoke Fund®.
What’s with the logo?
It’s a backcountry cowboy – a fishing guide who specializes in the flats and backcountry areas of Florida Bay. He’s wearing a balaclava as protection from the sun, and holding a pushpole to move his skiff around the flats, which are typically too shallow to motor through.
What is your investing philosophy?
We are a value investing firm. Cale Smith manages his portfolios according to principles followed by Warren Buffett. Lauretta Reeves managers her portfolios in the tradition of Sir John Templeton. To learn more about either, please drop us an email.
Like Buffett and Templeton, we view buying a stock as purchasing a long-term partial ownership position in a business, not as a piece of paper that changes hands daily. We manage others’ money the same way we manage our own, and because of that, we tend to study a company carefully prior to investing. We build focused portfolios of 15 to 20 meaningful positions in the common stocks of good businesses run by managers we admire. We do our own research, keep transactions costs low, buy for the long-term and above all ensure we buy shares when they are cheap. We are solely concerned with getting a good price on the shares of a few great businesses – independent of economic forecasts, Wall Street consensus and financial media noise. We believe this is the only rational way to invest.
Are you aware you named that first portfolio after a fish?
Yes. Tarpon are a revered sport fish in the Keys, where they also go by the name “silver king.” Tarpon can grow up to eight feet in length, live for fifty years and weigh more than 200 pounds. In addition to acrobatic leaps and large silver scales that resemble armor plates, tarpon have wide, clear eyes, which we thought was a pretty good metaphor for value investing.
And the ‘Gecko Folio’ name has its own origins, as do Frigate and Yellowtail and Treasure Harbor…but you’ll have to ask us about those in person.
How are you different from other firms?
Click here for the long version. In short, here are four of IIM’s biggest differentiators:
- We are an independent, fee-only firm, which means we have no conflicts of interest and have taken a fiduciary oath.
- Each portfolio manager at IIM has invested a significant portion of his or her own savings in the portfolios they manage. In contrast, it is estimated that only 43% of mutual fund managers own a single share of the funds they manage.
- We provide full transparency into what we are doing with your money, and why, and attempt to educate our investors as much as possible about the companies we all own.
- Our fees are low and based on how well we do our job, which is to find the best possible companies we can to include in our portfolios.
Our Spoke Funds® are also significantly different from the average actively managed mutual fund, as described here.
Who will be managing my money?
The portfolio manager for the Tarpon Folio and Gecko Folio is Cale Smith, the managing partner of Islamorada Investment Management. Lauretta ‘Retz’ Reeves, CFA, joined IIM in 2013 and is the portfolio manager for the Frigate Folio, Treasure Harbor Folio, and Yellowtail Folio too. Margie Smith runs the firm’s sales and marketing programs. Read more about Cale, Retz, and Margie here.
What happens if you all are eaten by sharks?
The money and securities in your Spoke Fund® accounts are held by our custodian FOLIOfn, and are protected by three levels of insurance for a maximum of $9.0 million per account. You are provided with full contact info for FOLIO during the sign-up process. In the event anything unfortunate should happen to either portfolio manager, you will still be able to contact FOLIO directly to withdraw your money as appropriate. In addition, Islamorada Investment Management has made arrangements with another fee-only firm to assist our clients with transitioning their assets after such an incident.
How do I know my money will be safe?
See the answer to “eaten by a shark” above. While no one can insure you against a decline in the value of your portfolio holdings, the cash and securities in your Spoke Fund® accounts will be as secure as possible. We cannot move, transfer or otherwise run off with any of your money. All we can do is buy and sell securities in the account set up for you. In addition, you can check for any disciplinary actions taken against us by searching this site (our record is squeaky clean), and we will provide you with our Form ADV during our initial conversations as more background.
What kind of stocks do you invest in?
Cale invests primarily in U.S. companies in Tarpon and Gecko. Lauretta invests in international companies in Frigate, Treasure Harbor and Yellowtail. We both invest in companies that have underappreciated strengths when trading at inexpensive valuations. We are in general seeking companies with attractive owner’s earnings, a large margin of safety and a signficant 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, and/or companies emerging from bankruptcy.
We do not attempt any economic forecasting, 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.
How old is your firm?
Islamorada Investment Management was formed in August 2008.
Does the world really need another fund?
A Spoke Fund® isn’t just another fund. While the world probably doesn’t need another mutual fund or hedge fund, we think investors have long deserved something as transparent and low-cost as the Tarpon Folio, for instance – run by a manager who is accountable by both action and net worth. We’re in it together with our investors, and we intend to maximize the return per dollar of fees paid by all of us.
Do you know Jimmy Buffett?
Ah, no. But never mind Jimmy… listen to Islamorada’s own Dave Feder. Buy “Saranade”. You’ll pass out.
When is it acceptable for tourists to feed the seagulls?
Are you on Facebook?
No. Did you see that movie??!
Any other questions?
Please contact us with any further questions at (305) 522-1333.
You can join our email list by clicking here.