Methodology

Investment Philosophy

Alambic’s investment philosophy reflects the belief that behavioral biases and information asymmetries create small, predictable deviations in individual stock prices from fair value.  Through back testing historical data, we have found that these biases have tended to be persistent and create investment opportunities that may be profitably harvested through a systematic process.  We have refined our process and products since the firm’s founding in 2003, but we have remained true to our valuation-based investment philosophy and our “automated equity-research” process.

One Process, Many Products

Alambic utilizes the same data cleansing, stock selection and optimization process for all of its products and funds.  This process can be easily customized to meet investor’s unique universe, leverage, exposure or benchmark constraints.

Systematic Process

Alambic’s stock selection process systematically identifies opportunities based on valuation, quality and growth factors.  Our proprietary factors were derived from decades of equity research experience and subjected to rigorous statistical and historical testing.  Our models forecast future returns of every stock in our investible universe. These forecasted returns along with estimates of trading costs and specified risk tolerances are then used as inputs into our proprietary portfolio optimizer which creates our target trades.

 

We are happy to be as transparent as possible about our process to prospective and current investors.  For more information please contact us.