Franklin Trend’s Investment Strategy

Firm Objective

Franklin Trend seeks to build wealth for its clients over a multi-year investment horizon, while actively managing risk.

Investment Philosophy

  1. High Quality. I seek to own high quality companies. Quality to me is a measurement of a business’s ability to generate consistent earnings growth. I feel that earnings growth is the primary driver for stock appreciation over a business cycle. A company’s earnings stability and superior financial strength combined with a quality management team are important ingredients to building a defensible investment moat.

  2. Focused Portfolio. If you look back in time at individuals who have achieved great wealth, they’ve left clues as to how they have accomplished this. History suggests the best way to achieve above-average results is to concentrate your portfolio into a few ideas. Conversely, broad diversification will only serve to dilute your results. I feel that a well thought out, focused portfolio will give our clients the greatest chance of growing and maintaining true wealth.

  3. Un-Conventional. In today’s investment landscape, people seem to feel more at ease failing conventionally versus succeeding unconventionally. From idea generation to portfolio construction to managing the down cycle, I maintain a very un-conventional process. I wear this as a badge of honor. With anything in life, if you are seeking unconventional results, then you must do something different than what is mainstream.

  4. Time Horizon. My time horizon is not defined by a particular fixed number of years. It is defined by the changes in the business cycle. The acceleration or deceleration in the business cycle tells us not only which assets to over or under weight, but also serves as a guide to adjust our expected time frame.

  5. Risk Management. It is one thing to have an opinion about current affairs, it is entirely another thing to have the discipline to effectively risk manage the position when price goes in your favor or against your original thesis. This is the essence of risk management. This is the difference between being right or making money. The future is unknown, so effective risk management is the only way to generate consistent results.

  6. Opportunistic. We take a Swiss Army knife approach to investing. We are generalists in the sense that we look at a broad swath of companies and asset classes. We don’t claim to be experts in any one business model, but rely on a long history of mistakes and proprietary knowledge to not only tactically invest across different assets, but also narrow the focus to specific companies for investment consideration.

  7. Consistency. The goal of every investor should be consistency. This may appear last on the list, but this is top of my mind. Successful investing is not about buying at the bottom or selling at the top, but it is about capturing a decent return relative to the amount you risked and repeating that process as many times as possible. Consistency is about mitigating losses when you are wrong and having the patience to allow the price movement to evolve when you are right.

Investment Strategy

I strive to build wealth for my clients through the ownership of individual securities of growing companies acquired at a discount to the appraised future worth of the business. I identify key catalysts and trends that commonly drive share price appreciation. Franklin Trend uses both fundamental and quantitative analysis for idea generation and risk management.

Products & Services

Franklin Trend offers a long-term, risk-managed active value strategy through a separately-managed account structure.