Our Investment Approach
O'Higgins Asset Management, Inc. (OAM) principally manages portfolios using several disciplined, value-based, asset allocation and security selection strategies, including MOAR (Michael O'Higgins Absolute Return), MOAR Plus, Dogs of the World, Dogs of the Dow, and Beating the Dow with Bonds.
The MOAR strategy has, historically, produced relatively high returns with very low volatility by spreading assets over four different asset classes: undervalued global stocks ("Dogs of the World"), physical gold or platinum, Intermediate Treasury Notes, and Long Term Treasury Bonds. The assets are rebalanced annually.
MOAR Plus allocates fifty percent of the portfolio to the DOTW and fifty percent to either precious metals or U.S. Treasury Bonds in alternate thirty year cycles.
The “Dogs of the Dow 5” (DOTD5) strategy is invested in equal dollar amounts, at the beginning of each year, in the five lowest priced stocks of the ten highest yielding components of the Dow Jones Industrial Average, at that point in time.
The “Dogs of the World” (DOTW) strategy, which seeks to invest in the most undervalued liquid stock markets in the world, is selected on a “bottom up” basis, from a universe of more than thirty different candidates. Although the DOTW model typically identifies five candidates, fewer or more may be selected. Once a country has been selected, traditional valuation criteria are used to select the investment vehicle or vehicles that are best suited to take advantage of the undervaluation.
The “Beating the Dow with Bonds” (BTDWB) strategy invests entirely in either the “DOTD5,” long term U.S. Treasury Zero Coupon Bonds, or one year U.S. Treasury Bills. If the earnings yield (E/P) of the S&P 500 is higher than that of the AAA Corporate Bond Index, the funds are invested in the “DOTD5.” If lower, the funds are invested in either Zero Coupon Bonds or Treasury Bills, depending on the price of gold. If the price of gold is higher than a year ago, the funds are invested in U.S. Treasury Bills, and, if lower, U.S. Treasury Zero Coupon Bonds.
As a rule, securities are of the liquid, blue chip variety and are held for at least one year.
No consideration is given to the tax implications of investment decisions. The firm's policy is to maximize risk-adjusted returns in the belief that this produces the best after-tax returns.
Although OAM strategies have historically produced "MOAR Return with Less Risk," there is no guarantee that they will do so in the future.