Tactical Strategies

Overview

Lyons Wealth Management presents Good Harbor Financial, a firm focused on innovative asset management programs. The Good Harbor Financial philosophy is that disciplined, model-driven investment approach that generates enhanced risk-adjusted returns.

When an investment strategy is expressed in model form, it can be researched, back-tested and verified. This provides a rich data set for return and risk management analysis. Through this process the firm has developed the Good Harbor Strategy, a tactical allocation model offered through Lyons Wealth Management.

Portfolio Strategies

GOOD HARBOR™
Annual Returns Summary (Net of Fees)
2003 * 2004 2005 2006 2007 2008 2009 * APR **
Good Harbor Strategy 34.85% 16.35% -2.49% 12.03% 0.87% 1.11% 49.14% 15.46%
S&P 500 Total Return Index 22.76% 10.88% 4.91% 15.79% 5.49% -37.00% 26.46% 5.06%

* – Data are not annualized

** – Annualized rate-of-return for period 4/30/2003-12/31/2009
Investment Thesis

Good Harbor’s trading philosophy drives our strategy development. We utilize disciplined, model-driven approaches to enhance returns. Our research establishes investment strategies with economic and statistical underpinnings. Through detailed analysis, we quantify and validate our strategies and seek to identify stable and persistent statistical relationships. Prior to deployment, our fund approaches withstand stringent criteria for parameter stability, low volatility and attractive return expectations.

The Good Harbor Tactical Allocation strategy is the culmination of a decade of research using over 100 years of market data. The strategy provides a buy-and-hold alternative, yielding cost-effective market exposure with the capacity to take a defensive posture in adverse market conditions.

Download The Good Harbor Brochure in PDF format from our website.

Download Good Harbor Performance Numbers in PDF format from our website.

INTRINSIC VALUE
Annual Returns Summary (Net of Fees)
2001 2002 2003 2004 2005 2006 2007 2008 2009 APR**
Good Harbor Intrinsic Value 31.30% 11.36% 41.86% 15.63% 27.87% 19.12% -0.87% 2.03% 66.80% 22.39%
S&P 500 Total Return Index -11.89% -22.10% 28.68% 10.88% 4.91% 15.79% 5.49% -37.00% 26.46% 0.00%

* – Data are not annualized

** – Annualized rate-of-return for period 12/31/2000—12/31/2009

Intrinsic value is a fundamentally-driven strategy that uses a traditional discounted cash flow model (a la Graham & Dodd & Buffet). An important element of this is knowing which type of companies will have a higher degree of predictive ability. The Good Harbor Intrinsic Value strategy seeks to generate superior risk-adjusted returns via a combination of fundamental valuation and options investment strategies. The investment universe consists primarily of firms engaged in businesses related to tangible assets sold into liquid markets. Examples include companies involved in the production of basic materials, Real Estate Investment Trusts and Master Limited Partnerships. A quantitative screening process reduces a universe of 500+ companies to approximately 50 using a database of company metrics.

A firm’s intrinsic value is then derived using a detailed cash-flow model. Stocks with high intrinsic value relative to market price are identified as potential investment opportunities. After equities are targeted using the IV models, we look to the options markets for opportunities to gain low-cost hedges on our positions. We are looking for option price anomalies that will allow us to buy cheap insurance typically using calendar or back-spreads. The end result: a long bias portfolio of theoretically undervalued companies with an options overlay for downside protection.

This strategy is for accredited investors only.

Please contact us for additional information on this strategy.

Download the Documentation on the Intrinsic Value Strategy in PDF format from our website.

Investment Management Team
Neil R. Peplinski – Managing Partner
Former portfolio manager for Allstate Investments overseeing $400 million portfolio of collateralized debt obligations.
Founder of Good Harbor Financial, Inc., an Illinois RIA with a 6+ year APR of 16.42% (vs. 4.31% for the S&P)
MBA from the University of Chicago Graduate School of Business
MSEE in Electromagnetics from The University of Michigan, BSEE in Electromagnetics from Michigan Technological University

Paul R. Ingersoll – Managing Partner
Co-founder NES – Business Services company grown from start-up to over $700 Million in revenue (IPO 1998)
15 years operating and finance experience with private equity-backed companies
MBA with honors from the University of Chicago Graduate School of Business

BS in Economics and French from The University of Michigan

Important DisclaimerThe data contained herein are presented for informational purposes only. This report is not an offer to buy or sell any securities or to adopt any investment strategy. Past performance is no indication of future performance. Lyons Wealth Management, (the firm) believes that this report provides a fair and accurate portrayal of the information being provided, subject to the warnings included in this disclaimer; however, the firm does not provide any assurances as to the reliability of such information and you should not rely on this information when making an investment decision. The Good Harbor performance figures are net-of-fees and represent a composite of time-weighted returns from all accounts managed to this strategy. Monthly returns are asset-weighted according to beginning period balances, and accounts are included in the composite starting with the first full month under management. All Data provided is Net-of-fees.

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