Our Investment Process
Our investment process begins with a global macro analysis from which we develop a client appropriate risk/reward profile. This gives us a wider range of investment opportunities, allowing us to better diversify risk across domestic sectors and multiple markets.
Our investment process is based on a traditional top-down global macroeconomic trend analysis.
Step 1: Determine the optimal global investment opportunities.
Step 2: Implement tactical strategies to reflect anticipated trend changes (i.e. asset allocation shift between equities, bonds, and cash).
Step 3: Use independent third-party macro research in order to overweight sectors/industries with improving cyclical trends, while underweighting those with deteriorating trends.
Step 4: Screen individual securities for balance sheet strength and management efficiency using Stuyvesant's Heat Map. The Heat Map follows approximately 30 metrics that seek to determine if the company is being run in a way that makes it better or worse at generating cash. It allows us to view each company as a machine, irrespective of the sector or industry in which it operates, whose purpose is to more efficiently generate cash from invested capital. In doing so we can augment our top-down macro-driven approach with a bottom-up micro approach. This should allow us to identify potential investments that may be in a sector or industry that we otherwise would have missed. We then determine "fair value" for each investment using our Earnings and Dividend Discount Model.
Step 5: Continuously monitor the positions in a portfolio context to ensure an adequate valuation cushion between our portfolio holdings and the market. This risk control measure should provide our investments with support during periods of market weakness.
Stuyvesant Capital Management favors a medium to long term investment strategy. For core equities we emphasize large and mid capitalization stocks. We have a strict buy/sell discipline. Our risk exposure is monitored continually and we regularly review our clients’ investments and objectives. We take advantage of global equity diversification, investing in the U.S. market, emerging markets and EAFE (Europe, Australia and Far East). Capital preservation has always been and will always be a top priority at Stuyvesant Capital Management.