Philosophy
We have four core beliefs that define our investment philosophy
- It is possible to consistently generate profitable returns through systematic trading
- Markets are inefficient and therefore trends materialize
- Trends last longer than people think
- Prices reflect the sum of the knowledge of all market participants
“… Human nature never changes. Therefore, the stock market never changes. Only the faces, the pockets, the suckers, and the manipulators, the wars, the disasters and the technologies change. The market itself never changes. How can it? Human nature never changes, and human nature runs the market – not reason, not economics, and certainly not logic. It is our human emotions that drive the market, as they do most other things on this planet.” – Jesse Livermore 1940
IIM’s Strategy Suite
IIM introduced its proprietary Systematic Hybrid™ strategy in July of 2012. It is available to investors in a Separately Managed Account as well as a private LP. In addition, IIM offers three futures-only strategies and two equity-only strategies. All of IIM’s investment strategies are systematic. Fully audited results are available upon request.
Incline Investment Management offers four distinctly different quantitative strategies. We provide investors with exposure to a variety of global markets through the use of both US equity markets and Global futures.
Equities and Futures
Tahoe Systematic Hybrid™
The strategy features two alpha engines; one is systematically trading individual equities while the second trades over 70 global futures markets across the six main sectors of futures. Applies trend following methodology to both engines. The equity engine takes long only positions in individual names and utilizes an index short position to mitigate downside risk. The futures engine can take a long or short position in any of the global markets it trades.
Equity Strategies
Eagle Point Free Cash Flow
Incline’s Eagle Point FCF Strategy utilizes a large cap universe of stocks and invests in companies exhibiting high cash flow yield and high cash flow growth. Companies are additionally screened for momentum and positions are taken on a volatility parity basis.
Emerald Bay Equity
A long only strategy on a large cap US stock universe seeking exposure to the highest momentum equities in the universe adjusted for volatility. This program may use significant leverage from time to time. Positions are sized based on volatility with more capital invested in the less volatile stocks. The positions are rebalanced bimonthly to maintain volatility and risk targets and to maintain exposure to the leading equities. When positions fall out of the portfolio and the market is in a defined uptrend, they are replaced. When positions fall out of the portfolio and the market is not in a defined downtrend, the cash is invested in short to intermediate term treasuries until an uptrend resumes which protects against large drawdowns.
Futures Strategies
Crystal Bay Ubitrend
Systematic trend-following systems tend to perform better the more diversified they are. The Crystal Bay Ubitrend strategy pursues extreme diversification in its portfolio by using the broadest investable universe of futures, including those traded outside the US, and by using portfolio construction techniques brought over from the equity world where correlations are high and unstable. The strategy aims to provide the kind of returns that early trend followers achieved before the industry became institutionalized and focused on asset gathering: volatile, uncorrelated, and idiosyncratic.
Systematic Approach
We don’t make attempts to predict the future. Instead we rely on research and quantitative analysis to help guide our decisions. By following a defined process built off robust models and careful technical analysis we believe investors can find success by maintaining the discipline of their plan and not straying from the path they set out to take.
Defining a trend IIM only takes positions in the direction of the long term trend of the underlying market. Our portfolios are systematically exposed to the most dominant sectors and the strongest securities within those sectors.
Entering a position Long positions are initiated on strength, typically when a security is at or near a new high while short positions are entered on weakness.
Exit strategy Stops are used to control initial risk. As the position becomes profitable, stops are trailed to capture as much of the price movement as possible while allowing for normal day-to-day volatility.
Volatility inputs Used to determine entry, stop, position size, and exit.
Dynamic approach Allow the markets to organically determine portfolio composition, diversification and allocation.
Risk Management Risk Management lies at the core of IIM’s strategy. Portfolio and sector risk are monitored to control volatility and reduce draw-downs. Hard stops are utilized and executed without exception.
Disclosure: It is also possible to lose money using a systematic trading methodology. Trading futures is inherently risky. these is risk of loss. Past performance is not indicative of future results.