Mr. Heaberg: Axiom is an investment advisory firm that was formed in 2003. Our clients are individuals and families- professionals, retirees, and business owners. Our approach is value-oriented. Our clients' portfolios tend to have low turnover and our thinking is long-term. We look for opportunities where we think that the risk/reward is strongly in our favor. In order to leave the safety of cash, we want to see the opportunity to earn a significant excess return and so we look for investments where we think that, if we are right, we can earn a significant upside and if we are wrong, then we won't lose too much, because clearly we are going to be wrong from time-to-time. Our client assets are held in the mix of asset classes between equity, fixed income, and cash. Typically our client portfolios are invested in individual securities rather than funds, although we occasionally invest in ETFs, mutual funds, or closed-end funds.
TWST: It's been a year of turmoil since we last spoke to you, although you did talk about it coming last year and how have events impacted your investing?
Mr. Heaberg: It hasn't changed our approach a whole lot. We were concerned this time last year about what we saw as some significant risks. As an update, in the past year, we went into last fall and through the winter with a significant cash position because of our concerns and that did allow us to somewhat buffer our portfolios against the market declines, although, we owned plenty of stocks and our stocks went down like everyone's did, I think.
So, through the course of the declines at the end of last year and into early this year, we saw opportunities that we took advantage of and actually reduced our cash holdings. Over the last couple or three months, we have again raised our cash holdings. Some securities that we owned have had significant moves up and we felt that it made sense to do some selling and we have found it difficult to replace those securities with investments where the risk/reward was strongly in our favor, especially given the overall uncertainty that we still face in the economy and in the markets.
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