Kirk Spano: Investment Management and Financial Planning

Investment Philosophy

I believe that a small universe of experienced and well educated investment professionals using a disciplined process and sophisticated analytical tools can consistently add value to client portfolios.

At the core of adding value to investment portfolios are three concepts regularly ignored by the investing public and financial industry:

1. Maintain a margin of safety and liquidity at all times. Avoiding significant losses is the key to long term investment success.
2. Focus on the value of assets to better know what price to buy those assets at, not the direction the price has been moving recently.  The evidence bears out that patiently waiting for excellent opportunities to buy valuable assets at sale prices is a prudent, profitable and safer approach to investing than what most investors engage in.
3. Ignore the crowd.  Eventually the crowd is almost always self-defeating due to investing based on emotion rather than facts. 

My philosophy and methodology do not generally coincide with the common wisdom of the day and are often contrary to other market participants.  Usually, the mass media, public at large and (my experience leads me to believe) too many financial advisors are most interested in "hot" or "in the news" assets, leading them to focus on information that relates little to the underlying value of investments and ending up being price speculators, not investors. 

I do not generally like the hot asset or asset class.  If a particular investment has been a recent cyclical market leader and it no longer appears fairly or under-valued, I usually will not want it.  I am very likely to invest in assets and asset classes that have been beaten down in the recent past, and show signs of recovering.

I am always cognizant of the advice that my first landlord game me, "Kirk, if you want to learn how to do something, learn from people who have already done it."  In managing money, I look to the great investors for guidance and direction, not the financial industry sales machine.

Investment Methodology

This is a short description of the conceptual framework on how I manage portfolios: 

1. Asset Allocation: I build core asset allocations based on long term secular economic and financial trends using a deep inventory of research and independent analysis.  I maintain a tactical asset allocation sleeve of investments based upon cyclical market trends and occasional deep discount opportunities designed to capture outsize invesment gains. 
2. Investment Manager Selection & Monitoring: I seek to align myself with the best money managers in the world by using several uncommon, but very important, screening techniques and researching managers more thoroughly than simply using star ratings.  My primary concern is finding managers with outstanding risk adjusted returns in various market conditions that have the circumstances to continue those types of results.  I favor managers who use methods similar to the value oriented techniques of Graham & Dodd, such as Warren Buffet.  I want to use managers who are focused, independent and have the courage of their convictions.
3. Investment Security Selection: For suitable accounts I manage a focused portfolio of individual securities from companies I believe have catalysts which can provide positive returns regardless of intermediate term (3 to 5 year) market conditions.  I use multiple screening and research techniques to uncover securities which fall into two broad catagories. The first and most prevalent type of investment I am looking for are "low hanging fruit" in line with Warren Buffet's quote that, "I don't look to jump over 7-foot bars; I look around for 1-foot bars that I can step over."  I will also consider companies in line with Peter Lynch's concept of why some investments go up in price in excess of market returns, "Companies (that) go from doing poorly to doing well or small companies (that) grow to large companies.”  In general we like to buy and hold any company we are willing to own at all.

*Because many people are uncomfortable owning stocks, for them we will maintain a core and tactical portfolio using managed investments, such as mutual funds and exchange traded funds.  

What I Will Do For You

Too many financial people are overly concerned with seeking an easy system for warehousing client's investment portfolios that do more for the advisor's pocketbook than the client's.  As a result, most people are taking more risk than they need to in order to achieve the investment returns they desire or need to retire.  Each portfolio I build, though it may share many investments with other portfolios I manage, is customized to each client's specific goals.  Your portfolio will be consciously constructed to manage risk to the level that a prudent investor should take in your situation and will be monitored on a consistent ongoing basis. 

For more information and to discuss how this approach can benefit you, please email me  or call directly by telephone at 414-617-6669.

Kirk Spano