March 10, 2010 9:19 AM ET
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Long-Term, Conservative (Value)
Ryan Lee
Strategy Long-Term, Conservative
Category Value
Average trade replication time 2 minutes
1,745 Views
5 Subscribers
Fees 1.50% of invested assets p.a. Subscription Min $5,000.00*
He employs a long-term, conservative approach with a 5-year time horizon. Focusing on fundamentals including ROIC, free cash flow, manageable debt and a history of growth, he looks for a 30% discount to intrinsic value.
Using a bottom-up approach, he utilizes a long-term, conservative approach in order generate a portfolio. With a 5 year time horizon in mind, he looks for securities that are trading at a 30% discount to intrinsic value. He determines intrinsic value using a discounted cash flow analysis and looks for ROIC above 10-15%, strong free cash flow, manageable debt and a history of growth.
He will begin by speaking with other value investors as well as reading news, press releases and ValueLine. After narrowing down the potential universe of securities, he will analyze 5 years worth of 10k information in order to determine intrinsic value.
Portfolio will typically have 10-20 holdings, with each holding representing less than 20% of the total portfolio. He will diversify across sectors in order to limit risk.
He will sell when (1) he believes a security has become overvalued, (2) he believes that the company’s prospects have changed or (3) when he finds a better investment.
He will sometimes purchase an ETF in a growing sector of the economy.
Investment Report
I have been doing quite a bit of reading about the current economic environment and I can't say that I am comforted. Everything I read, even from good thinkers and not just talking heads, seems to indicate the same thing. We have all heard it many times: inflation is around the corner--here comes inflation! I think they are correct.
The coming inflationary environment is going to be rough for...
February 2010
Personal Background
- Teaches private investment clinics
- Member of the Junto Partners entrepreneurial program
- He believes that the average investor can beat the market if willing to do the research
Experience on Covestor.com‡
Ryan Lee's Covestor.com Profile
- Overperformed S&P 500 for 10 of their 13 months on Covestor.com#
- Return Since Inception: 77.67% (February 2009)
- Last 3 Months Return: 2.63% (S&P 500 0.81%)
- Annualized Return: 68.74%
- Sharpe Ratio: 2.09 (S&P 500 -0.09)
- Maximum Drawdown: -24.89% (S&P 500 -56.78%)
Performance
| Inception October 19, 2009 | Model Manager | S&P 500 |
|---|---|---|
| Return Since Inception (%) | 7.99 | 3.87 |
| Month to Date Return (%) | 2.16 | 3.26 |
| Calendar 3 Month Return (%) | 3.53 | (0.39) |
| Sharpe Ratio | 1.70 | 0.63 |
Monthly Performance (%)
| Month | Return | S&P500 | Outperformance | Risk | Performance |
|---|---|---|---|---|---|
| Feb | 3.52 | 2.85 | 0.67 |
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| Jan | (1.43) | (3.70) | 2.27 |
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| Dec | 1.12 | 1.78 | (0.65) |
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| Nov | 6.03 | 5.74 | 0.29 |
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The performance of the model manager's account has been calculated by CVIM on a daily time-weighted basis including cash and broker commissions. These returns do not reflect any CVIM suitability or risk score restrictions and are exclusive of CVIM fees. Therefore, they do not represent the performance of the CVIM model available for subscription. Benchmark returns have been calculated by CVIM using a time-weighted calculation of daily valuations and do not include cash or transaction costs. Please see the additional disclosures below.
Top Holdings
| Symbol | Security | Exchange | Allocation (%) |
|---|---|---|---|
| Cash | n/a | n/a | 31.00 |
| ESI | ITT EDUCATIONAL SERVICES INC | NYSE | 19.43 |
| EBAY | eBay Inc. | NASDAQ | 10.91 |
| RSG | REPUBLIC SERVICES INC | NYSE | 6.20 |
| GD | General Dynamics Corporation | NYSE | 5.67 |
Total Holdings 13
Data displayed is as of market close: March 09, 2010
Recent Transactions
| Symbol | Security | Type | Price |
|---|---|---|---|
| EEM | iShares MSCI Emerging Mkts Index | Sell | $41.68 |
| EEM | iShares MSCI Emerging Mkts Index | Buy | $41.69 |
| JNJ | JOHNSON & JOHNSON COM | Buy | $63.47 |
| USB | U.S. Bancorp | Buy | $24.36 |
| GD | General Dynamics Corporation | Buy | $67.33 |
Data displayed is as of market close: March 09, 2010
* The Subscription Minimum is the minimum subscription required to follow a particular model. The minimum amount is determined by CVIM, based on the characteristics of the underlying model. It should not be considered as specific investment advice for your investment situation.
‡ Covestor.com performance data has been calculated by Covestor on a daily time-weighted basis of the equity positions of the account and is exclusive of any commissions and cash in the portfolio. The member's performance on Covestor.com, based on a separate account, may not reflect the strategy employed to manage the model available for subscription on CVIM. Please see additional disclosures below.
# Since the model manager's inception in Covestor.com
It should not be assumed that any information discussed herein will prove to be profitable or that decisions in the future will be profitable or provide similar results. The information set forth herein is not a substitution for personalized investment advice, and should not be construed as a recommendation to purchase or sell a particular security or to subscribe to a particular model.
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