Contact us: info@ablecap.com

Risks


All investments carry some level of risk. In order to be as transparent as possible, we believe it is important that the following risks be disclosed to all clients and all potential clients:

 

  • Market Risk - investments may decrease in value and you may lose money.
  • Our investment process is structured for long-term results - we may invest in securities that are currently out of favor knowing they may decrease in value or be volatile in the short term, if we believe the price paid is attractive versus what we perceive to be the value of the company.
  • Past performance is not indicative of future results.
  • Non-Diversification Risk - Concentrated portfolios may exhibit more volatility than a less concentrated portfolio or than the broader market.
  • Small Capitalization Risk - there will be an allocation to small and mid-capitalization stocks in all accounts managed by ACM.  Smaller companies may exhibit more volatility than larger, more established companies.  
  • Active Management Risk - in addition to the potential of losing money, performance of individual securities in an actively managed account like the ones we manage may cause the account to underperform other investments, investment managers or benchmark indices. There is no guarantee that ACM will achieve its investment goals. 

 

Risk Management


ACM does not view portfolio risk the conventional way by looking at volatility measures like Beta, Standard Deviation, etc. We view these standard measures as backward looking with virtually no benefit in helping us determine and understand earnings power and/or intrinsic value of an investment.

 

Instead, we look at the probability of permanent loss of capital on an investment. In our research, we focus on individual securities and the margin of safety of each investment. In general, we assess what we perceive to be the upside potential versus the downside risk and how likely we think it is that the upside potential will be realized over the long term. We understand the markets can be fickle in the short term, and we do not overreact to short term price movements.