Deen Capital Management, Inc.

Our goal: Outperform the S&P 500 in both up markets and down.

Our result: +52.6% for the 60 months ending July 28, 2010 (vs -1.0% for the S&P)

For complete performance data, click here

Frequently Asked Questions

Q: Does Mr. Deen manage his own money in the same manner as clients?
A: Yes, Mr. Deen "eats home cooking". He invests his personal savings in parallel with client accounts. We believe the following quote, from the December 30, 1991 issue of Barron's, still holds true today:

"How do you begin to evaluate stockbrokers and money managers? ... There is no better place to begin one's investigation than with personal ethics. Do they 'eat home cooking' -- managing their own money in parallel with their clients? I can think of no more important test of the integrity of a manager and the likelihood of investment success..."

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: How would you characterize your investment style?
A: Perhaps the best way to characterize our style is "short-term aggressive growth plus market timing." Or, to put it even more simply: "growth or cash". 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 up markets. Unlike aggressive growth funds, however, we aspire to sit on cash during down markets in order to avoid losses. Also unlike aggressive growth funds, we trade for the short term. We tend to buy on the heels of some major positive surprise, and then sell typically 2 to 12 weeks later -- after the news has been priced in. We also sometimes trade index ETFs, usually SPY [the S&P 500], as explained below.

Q: How are you different from other money management services?
A: There are several highly unusual features of our service:

We attempt to sidestep major market declines by sitting on a very high level of cash (50% to 100%) during periods of unusually high risk. Most money managers consider a "high level of cash" to be 10% to 20%. For more on this subject, visit our Risk Management page.

We buy stocks likely to go up NOW, and then we typically sell them after only 2 to 12 weeks. Growth stocks often make big moves in this short time frame, especially when they are under-valued and when there is some unexpected good news to spark a rally. In other words, we seek to capitalize on true surprises.

We concentrate our portfolio in a small number of stocks (typically 10 to 20).

Clients receive (at their option) weekly status reports by e-mail. These reports include the current value and performance of your account; details on stocks bought and sold; gains and losses, both realized and on paper; and Mr. Deen's commentary on current market conditions. (Mr. Deen also sends out a quarterly letter by paper mail.)

Every buy and sell is announced in our newsletter, usually within an hour of execution.

Q: What characteristics do you look for in a growth stock?
A: Click here for our profile of an ideal buy.

Q: How much do you charge?
A: Our newsletter, for a limited time, is free. Our quarterly managed account fee is based on a percentage of assets under management. A complete fee schedule may be found on our Managed Accounts page.

Q: Are there any costs other than your management fee?
A: Yes, E*TRADE charges a $5 commission on each trade. (This is a special low commission for Deen Capital clients.) Please note that our stated performance is always net after all fees and commissions.

Q: Do you ever sell stocks short?
A: No. We prefer the safety of cash during down markets.

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: Why do you sometimes buy SPY (the S&P 500 index tracking fund)?
A: For any of the following reasons:

Performance: There are times when Mr. Deen's stock picks (always growth stocks) are performing poorly, yet the market as a whole is doing fine. Perhaps growth is out of favor and blue chips are in favor. At such times, SPY may outperform Mr. Deen's picks.

To reduce risk -- the risk of falling behind: If you think in terms of a race between Deen Capital and the S&P (our #1 goal is to beat the S&P), then 100% SPY is a risk-free portfolio. No risk of under-performing. No risk of falling behind. In terms of this race, 100% cash is very risky. If the market goes up, we fall behind.

To mark time: If the market's direction is unclear, Mr. Deen may choose to mark time with "risk-free" SPY. When Mr. Deen again gets a bead on the market's likely direction, he will move funds, perhaps gradually, out of SPY and into growth stocks (if up) or cash (if down).

To quickly transition from cash to stocks: Buying SPY is a convenient way to immediately get back into stocks when Mr. Deen changes his stance from "bearish" to "bullish". Markets can change direction on a dime, and so can we.

Q: Can you manage my Corporate/Trust/IRA/Keogh/etc account?
A: Yes. If E*TRADE will open the account, we can manage it.

Q: Can you manage my account at Fidelity?
A: No. We work exclusively with E*TRADE.