I have been maintaining my MPAM Model Growth Portfolio since I founded Montecito Private Asset Management in early 2004. This portfolio exemplifies my portfolio management approach, and has performed consistently well during some of the most challenging and volatile market conditions in history. I do not like to sell performance, however, because investors should not choose managers based on historical performance (ever). Instead, I like to focus on process. I have been employing the same, highly effective portfolio management process throughout the 8+ years I have maintained this portfolio, which is a sector rotational strategy coupled with risk management through the tactical and strategic use of cash as an asset class. In other words, I identify and invest in those sectors of the economy that I think will do well and I avoid those sectors that I think will do poorly, while raising cash at certain times (like right now) when I believe stocks are overvalued and/or I believe that markets will correct. This approach works regardless of market conditions, economic conditions, political challenges, etc.
Unlike traditional style of portfolio management, such as large-cap growth, international, small-cap value, etc., each of which only has the potential to perform well under certain market and economic conditions, my approach is not style-dependent. Also, unlike virtually every major asset manager, I am not forced to stay 100% invested in my “style” regardless of what I think about the current market conditions. Right now, today, virtually every manager is 100% invested in their stated style, regardless of what they think about the market or economy and regardless of what the market and economy will do in the future. They remain 100% invested because that is what they promised they would do. This fact severely limits their flexibility, and prevents them completely from ever raising a significant cash position, even if they believe the market will fall dramatically.
I have maximum flexibility and routinely raise cash, which has served me very well over the years. Again, investors should focus on my process and not the performance results. It is the process that is responsible for creating the performance results over time. This does not mean that I will be able to continue to produce the same results in the future, but if you understand and believe in my process, you may want to consider investing with me.
For more information on the MPAM Model Growth Portfolio, please navigate to Strategies – MPAM Model Growth Portfolio.