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Frequently Asked Questions
Q: How would you characterize your investment style?
A: Perhaps the best way to characterize our style is "short-term
aggressive growth plus market timing." Like aggressive growth funds,
we tend to buy volatile stocks with excellent growth characteristics.
Like aggressive growth funds, our performance tends to lead the pack
during sideways and up markets. Unlike aggressive growth funds,
however, we aspire to sit on cash during down markets in order to avoid losses.
Q: How much do you charge?
A: Our newsletter, for a limited time during
this initial startup period, is free. (It will always be free to managed account clients.)
Our managed account fee is based on a percentage of assets under management.
A complete fee schedule is given on our
Managed Accounts page.
Q: Are there any costs other than your management fee?
A: Yes, the broker charges a small commission on each trade.
Please note, however, that our stated performance is always net after
all fees and transaction costs.
Q: How does your track record compare to the market?
A: A detailed comparison of Deen Capital versus the S&P 500 may be found on our
Performance
page.
Q: Do you ever sell stocks short, or trade options?
A: No.
Q: Do you ever buy on margin?
A: No, unless the client makes a specific written request. In that case, we ask that the client acknowledge
in writing that he/she understands and accepts the additional risk incurred.
Q: Can you manage my Corporate/Trust/IRA/Keogh/etc account?
A: If BrownCo
can open the account, if you have a minimum of $50,000 to invest,
and if you meet our criteria for risk tolerance, then yes.
Q: Have you modified your trading methods in the wake of the 2000-02 bear market?
A: Yes. In 2002, Mr. Deen re-engineered his trading models to reflect a more balanced
view of history -- a view which now includes a multi-year bear market as
well as a multi-year bull market. He also adopted three important new trading rules:
- Keep Losses Small. Our old trading model would, in some
situations, allow a stock to fall quite far before giving a sell signal.
Our new model has a much tighter "stop loss" feature.
- When Bearish, Sit Patiently On 100% Cash. The key
words here are "patiently" and "100%". "Patiently" because it may be
necessary to sit on cash for many months at a time. And "100%" because
we have learned from sad experience that it is quite possible to sustain
significant losses even when accounts are mostly in cash.
- Avoid Index Stocks. Prior to late 2002, we would buy index-tracking
stocks (e.g., QQQ or SPY) as a means of putting cash to work immediately when
we changed our stance from bearish to bullish. The problem is that we would
typically sell the index stock within a matter of days, either to retreat
back to cash if our bullish call was wrong, or to move the money into
individual stocks with even greater short-term appreciation potential
if our bullish call was right. Either way, we would often lose money.
Our computer timing model attempts to predict
the market's direction over the coming weeks and months -- not over the
next few days.
It is our expectation that these new rules and our revised computer models
will help us to better preserve capital during future down markets, while still
achieving outsized gains during sideways and up markets.
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