Predators, by their very nature, are required to be patient, cunning and quick. These attributes are reflected in the tactical approach our investment advisors adopt in advising upon a predatory investment strategy.
One renowned fund manager once defined stocks as falling into one of six categories; slow growers, stalwarts, cyclicals, turnarounds, asset plays and fast growers. Our Predatory strategy is to focus on two of these categories; Cyclicals and Fast Growers.
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Like any predator, before we launch an attack, we need to make a judgement call and ask, is there sufficient evidence to suggest that the upside potential is much greater than the downside potential, and that the probability of a rise in value is much greater than the probability of a fall?
Like all predators, we need to be prepared for the unexpected and plan accordingly. In investment terms, this means downside protection. So, although our Predator strategy is to be an aggressive seeker of growth, we need to maximise our chances of success whilst minimising our risk. Like a predator seeking out the weakest member of the herd, our strategy is to include assets and sectors which have fallen dramatically and where, in the opinion of our investment team, there is a strong probability that these assets will recover some of their value quickly. A good example is the precious metals sector, where volatile values can present attractive buying opportunities for the fleet of foot.
Predators need to be aggressive to succeed and this characteristic means that our Predator strategy cannot provide a cautious to balanced approach to risk. Indeed, to successfully hunt in these markets, our Predator strategy requires an adventurous attitude to risk, and it is the willingness and ability of investors to take this approach that will determine whether our predatory strategy is suitable for them.
For further information, please log in to our Vantage client pages from where you can access full details of this service including useful background materials on the investment sectors themselves.