OCM Three-Year Investment Results

Positive returns with no crystal ball

On July 31, 2008, Osbon Capital Management (OCM) completed its first three years of index investment management for clients.

When we created client portfolios three years ago, we didn't know that oil and gold would reach $147 and $1000, respectively; that GM would hit a 50-year low; that Bear Stearns would collapse; that banks and others would write off half a trillion dollars in bad credits; or that the China/Shanghai Composite would plunge 52% from its peak.

However, to achieve solid results, OCM did not need to foresee or predict these or any other events that have come to pass since 2005.

What we did know was that owning all markets allows investors to participate in economic opportunity in all geographic and industry sectors and limits exposure to any single problem area. We also knew that zealously controlling client expenses increases client returns and tax efficiency allows clients to keep more of what they make.

That discipline — relying on carefully chosen low cost tax efficient ETF indexes, concentrating on asset allocation, and resisting any temptation to act on intuition or prediction no matter how plausible — has driven OCM's first three years of performance, and will drive future performance as well.

Our results are attached below. Of course, three years is a very short time for a firm that thinks and invests generationally. Nonetheless, the challenge remains to protect and grow capital through all investment environments, and to add value in excess of costs. Here's how we did. Click here for performance details.

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John Osbon, Managing Partner
September 2008