Astute Anomaly Fund
A high-growth investment fund
We provide long-term capital growth primarily through investment in a portfolio of global, small cap, high-growth, high quality, public technology companies.
- The Astute Anomaly Fund specializes in investing in anomalous areas of markets. These are areas where, for one reason or another, the market has not valued an asset competitively. Either there is a lack of coverage, lack of liquidity, lack of knowledge, lack of interest or hidden value and, as a result, there is mis-pricing. This effect can occur in small, forgotten illiquid stocks where there is little price competition and can occur in large stocks where analysts may have missed an internal asset that has not been properly valued over time.
- In currencies, mis-pricing or anomalies can occur through imbalances that build up over long periods of time. In commodities, they can occur through excess or shortage of demand, weather conditions, and extreme events.
- Mis-pricing can occur in certain financial and economic situations, such as when stocks, or markets, crash or rise very sharply. These can be termed as emotional mis-pricings in a high volatility environment.
- These mis-pricings or anomalies can present great pricing/entry point opportunities followed by an extended trend of growth or recovery. The lengths of trends are impossible to predict, they may be short or very long term.
- Finally, the market may not perceive or price a long-term trend correctly. An example of this might be an Amazon or Tesla.
Small company earnings do not grow in the same smooth, regular, quarterly way as large companies.
Share prices can be volatile and drawdowns can be large.
Therefore applying the same metrics, methodology and investment criteria to small companies as one does to large companies is foolish.
Take a look at the volatility of these stocks as they grew :
INVESTMENT INVOLVES RISK !
- Investment in small cap stocks involves a high degree of risk. Small cap stocks are illiquid and volatile. Low liquidity may result in the potential unavailability of the stock at a good price to purchase and/or it may be difficult to sell the stocks at a favorable price. Low liquidity may also add to the overall risk of the stock. Volatility may create a large change in the value of a stock – both positive and negative.
- Small-cap companies may have an unreliable and faulty business model. In this case, if the company’s management is not able to adjust the business model, it may result in poor operational and financial results.
- In general, smaller capitalization companies are also more vulnerable than larger companies to adverse business or economic developments and they may have more limited resources.