Jantz Management’s investment strategy is to develop quantitative models that synthesize fundamental financial principles and market dynamics to estimate a firm’s long-term value. Using these models, investment opportunities are detected where current market price and a company’s value are misaligned. By holding an appropriate number of these opportunities, the aggregate portfolio’s performance will be greater than the relevant index but with similar risk characteristics. Gains are harvested on a prescribed periodic basis and no fund will be allowed to grow beyond its efficient size.
Fundamental to the firm’s approach is the use of System Dynamics. Developed by Jay W. Forrester, Professor Emeritus, MIT, System Dynamics is a powerful tool for modeling complex systems where feedback, time delays, and qualitative information are important in understanding the system’s dynamic behavior. This discipline provides the methodological framework allowing the integration of key financial concepts and market structures into models that can be tested and improved over time. Dynamic probabilistic parameterization is used to calibrate a handful of important factors within the system dynamics models, with great care taken to avoid data mining. Each company’s current and historic financial data is put through the model to determine if its stock is mispriced in the marketplace. Systematic application across an asset class results in a rigorous and dispassionate process that leaves no opportunity undiscovered.
Jantz Management distinguishes itself through its disciplined adherence to the models and processes – investment decisions are made based on the sound fundamentals embodied in the models, not hype, or emotion.
Jantz Management seeks to provide its clients with choice in the values they wish to have reflected in their investment portfolios. For that reason, the set of values reflected in the firm’s various portfolios are distinct. Nonetheless, all the firm’s portfolios have at their core, models developed using our quantitative methodology.