Follow the Earnings Growth

The Marin Group employs a proprietary method of investment management called “Cycle Investing” which seeks to keep monies invested in stocks that are within industry groups that are receiving the most benefit from the current stage of the economic cycle.  The market is made up of both growth and value stocks, and growth tends to outperform when value underperforms (and visa versa). Thus, it makes sense that committing to only one of these types of stocks would cause a portfolio to underperform or just equal the broad market’s return over the long term. The recent explosion of companies wanting to be a manager of money managers shows the need for having exposure to both types of stocks. Unfortunately in these programs managers often drift from their particular style and come up with a new definition of growth or value to be able to own the hottest stocks of the day. This results in duplication of ownership in certain stocks and defeats the purpose behind the whole program.

We have clearly defined models that screen for growth,  value or new technology stocks and also guide our buy-sell decisions. We take a “top down” approach to decide what cycle we are in and what stocks are the most likely to perform the best.