Insightful interviews and discussions with leading portfolio managers, investors and entrepreneurs from the world of alternative investments.

In this episode of Strategic Investor Radio, host Charley Wright interviews Alan Stone of Wall Street Research. Mr. Stone’s firm, which is headquartered in Los Angeles, publishes newsletters and reports focused on small- and micro-cap stocks. These stocks may trade on major exchanges or over-the-counter, or they may be entirely private.

Mr. Stone graduated from Wharton, where he studied economics and finance. He had a notable career on Wall Street before relocating to Los Angeles more than a quarter-century ago, which is when he purchased the then-fifteen-year-old Wall Street Research brand from its original owner. Stone repurposed the newsletter as an online publication, and twenty-five years later, his site – WallStreetResearch.org – is the top listing for the popular Google search “Wall Street research.”

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In this episode of Strategic Investor Radio, host Charley Wright talks with Taylor Garrett. Mr. Garrett is Managing Director of Central Trade & Transfer, a Salt Lake City-based firm that operates an “eBay-type” auction system for non-publically traded assets.

Garrett explains that Central Trade & Transfer began as a marketplace for limited partnerships (“LPs”). Then, after the Financial Crisis, the firm reorganized in its “2.0 version” as an online auction platform for illiquid assets like non-traded real estate investment trusts (“REITs”) and business development companies (“BDCs”), private equity funds, venture capital funds, individual real estate assets, entire companies, and “all shapes and sizes of LPs.” Garrett says most of Central Trade & Transfer’s business has been with domestic assets, but there have been some international assets sold through its auction system, as well.

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In this episode of Strategic Investor Radio, host Charley Wright interviews Sanford Coggins, the founder and president of VisionWise Capital. Mr. Coggins has over three decades worth of experience in commercial real estate and a background as a registered investment advisor (“RIA”). He combines his expertise from both fields to make VisionWise a sort-of “RIA of real estate.”

Coggins has always been a high achiever. He played quarterback for the University of Texas Longhorns and then went into commercial banking right out of college. From there, his career path took him into commercial real estate right ahead of a big downturn for the market, when he moved to Merrill Lynch. Shortly thereafter, Coggins started his own RIA firm, but then decided that real estate was his preferred asset class, so he founded VisionWise.

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In this episode of Strategic Investor Radio, host Charley Wright interviews Suneet Singal, founder and managing partner of First Capital Real Estate Investments, which is headquartered in New York City. Mr. Singal says he started working at age 11 and hasn’t looked back since. He began his career working for a Fortune 500 firm but quickly decided he wanted to work for himself. Since 2001, he’s been a loan officer, a manager, a broker, a securitizer, and he’s built both a wholesale and real estate platform, totaling 15 years’ experience in real estate financing and operations.

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In this episode of Strategic Investor Radio, host Charley Wright interviews Sandra Powers, Ark Global’s founder and CEO. Ms. Powers has close to two decades of experience in the financial services industry, with roughly half of that time spent at State Street Global Advisors, where she was responsible for marketing and communications related to the firm’s largest pension plan clients. In 2007, she founded Ark Global, which provides consultation to investment managers looking to raise institutional capital, and to institutional investors looking for high-quality, differentiated investment managers.

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In this episode of Strategic Investor Radio, host Charley Wright interviews Tom Florence, president and CEO of 361 Capital. Mr. Florence began his career as an advisor with Merrill Lynch in 1985, before moving to Fidelity. Later, he had the pleasure of serving as managing director of Morningstar, working under company founder Joe Mansueto. Florence says it was his idea for Morningstar to get in the asset-management business, and the firm now manages several billion dollars for advisors and advisors’ clients. 

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Dick Pfister, founder and CEO of AlphaCore Capital, is Charley Wright’s guest on this episode of Strategic Investor Radio. Mr. Pfister has nearly a quarter-century of experience in alternative investments, starting as a floor trader in Chicago and later becoming a partner at Altegris, and he says he was inspired to start AlphaCore when he had a “personal liquidity event” upon selling his prior company. Advisors were essentially serving up “60/40” solutions, and in Pfister’s view, that approach is outdated and alternatives are essential. [read more]

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Listen to Brian Mitts who discusses the wide variety of investments offered by Highland to the marketplace and, more specifically their Healthcare BDC.  This interview was done at the ADISA Conference in San Diego

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Griffin Capital Corp

Randy Anderson discusses real estate opportunities for Griffin Capital Corp.  This interview was done at the ADISA Conference in San Diego.

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The Passco Companies

Listen to Bill Passo, founder  and CEO of The  Passco Companies, is a longtime real estate investment firm.  This interview was done at the ADISA Conference in San Diego.  

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Listen to John Grady, founder and president of Asset Management Advisory Co and President Elect of ADISA, discuss the agenda and important of ADISA.  This interview was done at the ADISA Conference.

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Listen to Keith Lampi discuss the 1031 Exchange and DST market for Inland Private Capital Corp, during the ADISA Conference in San Diego.

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Listen to Louis Rogers, founder and CEO, focusing on 1031 Exchanges and Delaware Startutory Trusts (DST's).  This interview was done at the ADISA Conference in San Diego.

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Listen to this interview with Kevin Gannon, President of RAS, and most importantly, a staunch Irishman.  Stanger and Co. is an Investment Banking Firm focused on the Non-Traded REIT and Business Deveopment Company marketplaces.  This interview was done at the ADISA Conference in San Diego.

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MCI Megatel Capital

Listen to Michael Roman tell about MCI Megatel's home building business in the Texas marketplace.  This market is red hot, with loads of opportunity.  This short interview occured at the ADISA Conference in San Diego.

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In this episode of Strategic Investor Radio, host Charley Wright interviews Joe Childrey. Mr. Childrey is the CEO and founder of Probabilities Fund, and a three-time guest of the show.

Conventional wisdom teaches that investors can’t reliably time the market, but Mr. Childrey has a strategy that’s unconventionally wise. The Probabilities Fund enters and exits the broad market, primarily through the Vanguard S&P 500 index fund, moving to cash or even going short during bear markets, and using leverage to amplify long positions during bull markets. Morningstar says the fund has 1,000% annual turnover – that’s an active strategy. [read more

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In this episode of Strategic Investor Radio, host Charley Wright interviews Fran Seegull, chief investment officer for ImpactAssets. Impact is a nonprofit dedicated to increasing the flow of capital and democratizing access to impact investments, which are investments that seek to maximize social, environmental, and financial impact. [read more]

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In this episode of Strategic Investor Radio, host Charley Wright interviews Ryan Wright (no relation), the founder and CEO of Fig Tree Capital Ventures. Dallas-based Fig Tree is focused on direct investments in oil, gas, and real estate.

Ryan says oil and gas investors tend to be emotional, and this partially accounts for the commodities’ volatility. His firm is focused on the Stack area in Oklahoma, which isn’t as famous as other patches like the Bakken in North Dakota. But Ryan says the Stack produces higher-quality oil in accordance with the West Texan Intermediate (“WTI”) standard, whereas oil from North Dakota trades at a $7-8 per-barrel discount. [read more]

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In this episode of Strategic Investor Radio, host Charley Wright interviews Randy Swan of the eponymous Swan Global Investments. Randy is the founder and president of the Durango, Colorado-based firm, as well as a portfolio manager. He started the company in 1997 after beginning his career as a CPA, but his interest in investing runs much deeper: Randy says he has been an “avid investor” since he was 14 years old, and his experience through the market’s ups and downs – including the 1987 crash – helped him develop the risk-mitigation strategies he implements at Swan Global Investments.

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In this episode of Strategic Investor Radio, host Charley Wright interviews Chris Lakumb of RiverNorth Capital. The Chicago-based firm, founded in 2002, specializes in closed-end fund (“CEF”) strategies bundled in mutual funds, closed-end funds, and private funds. Beginning in 2004, RiverNorth set its focus on research, development, and analysis of CEFs. This is a comparatively inefficient market, which presents opportunity for disciplined investment managers. 

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Don Deans is a CPA tax strategist from Charlotte, North Carolina. In this episode of Strategic Investor Radio, host Charley Wright interviews Mr. Deans as he explains four unique opportunities for accredited investors: Oil and gas drilling partnerships, passive activity, micro-captive insurance companies; and conservation easements.

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In this episode of Strategic Investor Radio, host Charley Wright talks with Andrew Gogerty of Boston-based Newfound Research. The firm was founded in 2008 and is known for its tactical investment models and the mutual funds that are based on them. Prior to joining Newfound, Mr. Gogerty spent a decade analyzing alternative investment strategies for Morningstar.

What exactly is meant by “tactical” investing? In Newfound’s case, the term refers to using sector momentum and asset-class volatility to inform investment decisions. The models are based on the premise that investors always care about capital preservation, no matter what their other investment objectives may be.

Newfound’s tactical models generally work across all asset classes and represent strategic “tilts” toward either better returns or more safety – whatever suits the investor’s needs. The firm originally provided research and sub-advisory services, but in 2013 it built its own suite of strategies that are now available in both mutual funds and separately managed accounts (“SMAs”).

When asked were the optimal conditions for the Newfound models’ success, Gogerty cited consistent trends, either up or down. The worst conditions for the strategies are when markets are choppy, with big swings up and down but no consistent pattern.

No investment strategy can be right 100% of the time, and that’s why Newfound dollar-cost-averages into and out of positions. According to Gogerty, every time the S&P 500 has gone up or down 20%, the index has taken more than a year to complete the move – thus, an incremental, dollar-cost-averaging approach to entering or exiting positions doesn’t present a great deal of timing risk.

When asked what keeps him up at night, Gogerty said people who “invest walking backwards through time.” He drove home the point with a Yogi Berra quote: “The future ain’t what it used to be.” Just because “60/40” worked in the past, doesn’t mean it will in the future.

Gogerty also cited Research Affiliates projections for ultra-low returns from the stock and bond markets over the next ten years, and added that the “FANG” stocks – Facebook, Amazon, Netflix, and Google – accounted for the vast majority of the S&P 500’s gains in 2015.

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In this episode of Strategic Investor Radio, host Charley Wright interviews James Hanson, the president and CEO of Morristown, NJ-based Hampshire Real Estate Company. Mr. Hanson is co-chair of the Rutgers University Center of Real Estate Studies and an advisor to multiple endowment funds and pension plans throughout the company. Hampshire is a third-generation family company, founded by Mr. Hanson’s grandfather in 1922, and it currently has more than 100 employees managing 259 properties in 28 states.

Mr. Hanson offers a very sobering view on the future of real estate. He’s concerned that the U.S. is likely to enter another recession in the next four years, and that “yield chasing” has made attractive investment opportunities more difficult to find. He’s bearish on multi-family real estate, for which he says supply has outstripped demand; and even industrial properties, previously a favorite area of his firm, may be overbought.

James Hanson Hampshire Real Estate Company
James Hanson, President and CEO, Hampshire Real Estate Company

The areas Hanson likes include triple-net leases, necessity-based retail, and self-storage.

1. The first refers to single-tenant leases to investment-grade corporations, with 15-20-year terms, that are net of taxes, insurance, and operating income.

2. The second refers to retailers that deal in the necessities of life: i.e., grocery stores.

3. The third, self-storage, is part of what Hanson refers to as real estate “alternatives,” along with senior living and student housing.

Hampshire has experience in a wide array of real estate properties, but not senior living and student housing. Hanson says he likes self-storage because it addresses life emergencies that happen during economic good times and bad (i.e., divorce).

When asked what investors should look for when investing with a real estate company, Mr. Hanson listed three things:

  • Track record (in good times and bad)
  • Depth of operational experience
  • Strength of the team

When asked what keeps him up at night, Hanson’s answer was simple: “The economy.” With no real trend or pattern, but plenty of volatility, it’s difficult to plan. He also noted that the supposed recovery from the previous recession has been much weaker than previous recoveries.

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In this episode of Strategic Investor Radio, host Charley Wright interviews Cognios Capital CEO Gary DiCenzo. The two gentlemen discuss Cognios’s “ROTA ROME” investment methodology, which seeks the best companies in terms of Return On Tangible Assets (“ROTA”) and Return on Market-value Equity (“ROME”).

Why does Cognios think tangible assets are so important? DiCenzo explains that “good will” accounts for the majority of intangible assets, and that his firm has determined that “ROTA” is the best metric to find companies that make the most of their available resources. The “ROME” element is there to make sure the stock is trading at a good price at the particular time, because even good firms can be overpriced.

How confident is Cognios about the veracity of its ROTA numbers? DiCenzo explains that Cognios only invests in S&P 500 companies, and that he’s confident in the integrity of their data.

When Charley refers to Cognios as a “quantitative” operation, DiCenzo clarifies that his firm doesn’t use technical analysis, earnings momentum, and other such measures, but instead does a deep dive into company fundamentals. ROTA ROME provides the structure to comb through millions of pieces of fundamental data to find the best companies for the Cognios portfolio.

Cognios currently operates one ’40 Act mutual fund: the 5-star rated Cognios Market Neutral Large-Cap Fund (MUTF:COGMX), which is also available in institutional-class (MUTF:COGIX) shares with a $100,000 initial minimum investment. The fund’s investor-class shares, which have a $1,000 initial minimum, returned an annualized +7.20% for the three years ending April 30, 2015, ranking in the top 7% of their category.

The fund uses a “systematic, repeatable process” to isolate alpha – which, in DiCenzo’s view, is all investors should be willing to pay for. The fund is market-neutral with between 190-200% gross market exposure. The long portfolio normally consists of about 45 names with an overall beta of 1.0. The short portfolio is more diversified and more volatile, with a beta of around 1.5. To balance out the risks, Cognios invests around $1 long for every $0.66 sold short.

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Matthew Rossi is the founder, managing partner, and chief of research for MarketDNA Investment Research. In this episode of Strategic Investor Radio, Mr. Rossi explains his firm’s eponymous MarketDNA product, which takes intraday data and runs it through an algorithm to “spit out” equity trades with 80-90% accuracy. Host Charlie Wright calls MarketDNA a “fascinating approach of how to invest.”

MarketDNA uses around 100 filters to ex-out “noise” and find the 1-2 big derivatives trades happening because of inefficiencies in information. Sometimes this means finding “insider trading,” and Rossi shares a story of meeting Martha Stewart’s brother on a golf course before the infamous ImClone trade that landed her in prison. According to Rossi’s story, Ms. Stewart’s brother asked him to lie on her behalf, claiming she traded on the basis of his research instead of illegal inside knowledge. Needless to say, Mr. Rossi refused!

Rossi also discussed an incident with OPRA (the “Options Price Reporting Authority” – no relation to Ms. Winfrey) when MarketDNA’s algorithms noticed its servers were down and received a phone call from a suspicious OPRA executive asking how they knew – no one else in the country had.

MarketDNA typically holds 7-10 positions, long or short, at any given time, and each of these positions is normally held for 3-5 weeks. The firm’s clients are hedge funds and institutional investors, but it has begun making a la carte research available to individual investors. These one-off recommendations come instructions to buy or sell-short with entry and exit prices, but no other research.

When asked what causes some MarketDNA trades to fail, Rossi blames short squeezes and raised guidance around quarterly earnings. Fortunately, most of MarketDNA’s trades aren’t earnings-related.

When asked what keeps him up at night, Rossi cites the excitement of his work – trying to identify a previously unobservable trade, and making sure no one out there is cheating.

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