Mr. Jordan: Hellman, Jordan was founded in the late 1970s as a boutique investment advisor to wealthy individuals. Over time, we have attracted pensions and endowments as well. We started managing a public mutual fund, the Jordan Opportunity Fund, four years ago, which was the outgrowth of a separate account we have been managing for a very long time (so we have data that actually goes back a long time on that fund). We have always worked through a top-down process of focusing on three-to-five secular themes where we believe there is an enormous opportunity in that industry or sector over time.
We then use a bottom up approach to aggressively fill positions in the stocks. As the stocks play out, we may trim them back if we think they are getting ahead of themselves, and then add back to those concepts and those ideas as the stocks correct. We always thought the best way to manage money is to find the ideas that make the most sense, and invest in them, regardless of what their weightings may or may not be in the indexes. While it often creates benchmark risk, we believe its the best way to manage money.
TWST: We last spoke right before the March correction, so why don't you tell us how that impacted your investing.
Mr. Jordan: We were very, very bullish going into the lows in March. We were aggressively positioned; we had very big weightings in financial services, banks, brokers, exchanges etcetera. We were very aggressive buyers of a number of Chinese companies, particularly technology companies, involved in the video game industry. We were also very heavily positioned in a number of commodity areas; energy, crude oil, oil services, natural gas, steel, copper, iron ore and we continue to have heavy weightings in those areas. This has resulted in a tremendous year. While the market has had a great run, we've had a better run.
We believe that the markets are getting on towards fair value. Going forward, it will require a lot more work to be successful and to make money in the markets, though we think there is a plenty of opportunity over the next 12 to 18 months. Given the overall environment, we really don't want to make predictions much past that, given the global volatility we have seen over the last five or ten years, but we think the opportunities for the global economy to improve continue to get better. If the economy is stronger than most people expect, it will result in better earnings for a number of companies in our portfolio.
Tickers included in this excerpt: AAPL, ABT, AMGN, BHP, CYOU, GILD, MYGN, NOK, NOV, NUAN, PALM, PBR
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