Our analysis starts with the precept that no one knows a business as well as the people running it. The General Partner therefore prefers to invest in highly liquid securities at or near prices that insiders have been willing to purchase significant amounts of their own company’s stocks, bonds, or other liquid securities. This currently whittles down the universe of 3600 or so publicly traded companies to between 200-350 companies based on our select criteria.

Our proprietary software continuously tracks this universe of companies, issuing alerts based on buy and sell algorithms as part of its trading strategy. Although insider selling is a poor predictive tool compared to insider buying (people buy for one reason but may sell for many), we analyze patterns that might signal future business challenges. For example, multiple insiders selling at 52-week lows does not portend promising business prospects. Our technical and quantitative analysis is is backed by rigorous fundamental analysis. The General Partner deploys a 10-point checklist that includes but not limited to discounted cash flow valuation, PEG and PE ratios, analyst opinions as well as significant catalysts; such as adverse or positive litigation outcomes, drug and medical invention approvals or denials, and patent disputes, etc.

As an opportunistic long/short hedge fund, the General Partner may use leverage in Partnership investments. The Fund has no mandate to be invested at all times and may hold large cash balances and/or hedge positions with futures, options, ETFs, and/or derivatives. The Fund views its capital as its inventory, seeking to find that equilibrium between the most efficient inventory turnover and maximum ROI.

The Fund, itself, was established in 2010 after nine years of executing an investment strategy based on this combination of fundamental and technical analysis built on the prescreen of insiders’ activity.  The Insiders Fund doesn’t outperform the market in every time period as insiders historically buy their stock when they perceive it to be cheap, undervalued, or perhaps before it is about to be transformed by new technology, improved business prospects,  or even new ownership such as a buy out.  Their buying doesn’t conform to the investment performance calendar that funds such as this one report to.  Patient investors will be amply rewarded, though, as this strategy has outperformed the S&P 500 by over 400% since 2001.  Built on a common sense strategy, The Insiders Fund is an all weather diversified portfolio, designed to maximize investment returns in all markets, bull, bear, or stagnant.