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Umbra Fund

Investment Timeline

We will meet, according to your discretion. We will then discuss investing in the stock market and see if it coincides with your financial goal. An in-depth discussion regarding our investment strategy and our intellectual property will require your signature on a non-disclosure agreement.

We will review the documents that explain our fees and the fund’s logistics. We don’t hide anything from our partners, but we highly suggest that you read the documents to alleviate any ambiguity.

We offer three investment terms; we will discuss which term corresponds best with your financial objective.

To invest into the fund, you will need to fill out the subscription agreement.

We are required to validate your status as a qualified client.

The wiring instructions will be given in the subscription agreement. The money will be untouched in the limited partnership’s bank account.

You will become an official partner, and your investment will commence at the beginning of the upcoming quarter. Umbra Fund’s investment strategy is centered on earnings season; this is when we are the most active in the stock market.

The first and most important lesson we learned from studying stocks, is that we have to demystify the information presented to us. We aspire to apply that lesson to this fund. Transparency is crucial for this fund’s growth because we’re not trying to sell you anything; we’re trying to invest your wealth.

What is Umbra Fund

Umbra Fund is a long/short equity fund; which means that we seek opportunities for when stock prices both appreciate and depreciate. We specialize in analyzing quarterly earnings reports and improve that specialization through our intellectual property. Quarterly earnings reports are focused upon because it is a consistent catalyst that can be analyzed.

We are short-term focused upon selection and entry, allowing us to circumscribe the risk for the investment. If the investment is profitable, then additional analysis and management will be performed to determine the exit strategy.

Raison D'être

Convenience

Investing in the stock market requires a large amount of time; investment decisions cannot be flippant or careless.

Objectivity

Having objectivity is difficult because you have to erase sentiments from money. The discrepancies between money and capital cannot be ignored.

Our Approach
We use unique, custom-built tools to give us the edge

A code of ethics is usually a contrived composition of insincerity; however, the code of ethics for Umbra Fund is simple, honest, and is essentially this:


  • Our partners should never be ashamed to be a member of this fund.


We are emblematic of our investors, whether it is preferred or not. We refuse to cover this page from top to bottom in quixotic principles because you can be guaranteed that we will keep this fund, and ourselves to the highest standard. If you, a partner ever considers that we are not keeping this fund, or ourselves to that standard, we implore you to inform us in an expeditious manner; Umbra Fund is as much yours, as it is ours.

You should seek a fiduciary who has your interest in mind; there should be mutual benefits and detriments. As establishing investment managers guaranteeing a fiduciary duty is our strength. If invested into us, you will know our character and our investment philosophy.

We believe that you should be able to identify your fiduciary’s religion, politics, middle name, or whatever you want to know; some may say that it is too personal, and indeed it is, but managing your money is just as personal. As a partner of this fund, you will be empowered, not restrained. There are many difficulties when investing, and things don’t always go as planned, that is why you need to be satisfied with your fiduciary.

The philosophy in which we hold in high regards is that of a meritocracy, a system in which an individual’s actions and character are placed above preconceived notions. Merit is not bequeathed; however, it is earned when an individual strives to improve one’s self and craft. We have made it our self-goal to demonstrate how a meritocrat should behave, in not only their profession but in their character as well. There is no reason for anyone to hold us to a higher standard if we cannot even hold ourselves to that standard.

Our competitors are not oblivious of the knowledge that we possess; however, the established success that they profoundly cherish hinders them. We do not have a fictitious edge that places us above our competition, for us to assume that we are miraculously better would be foolish. Versatility is our method and advantage, renouncing our ostentatious egos without hesitation in order to develop, not only defines us but Umbra Fund as well.

Our investment strategy is modified to mitigate risk, and we use our intellectual property to accommodate this process. The stock market is comprised of a finite amount of information, able to be applied in an infinite amount of investment strategies. We capitalized on this limited amount of information by creating analytical tools. This intellectual property expedites improvements for our investment strategy, by granting an uncomplicated analysis through structured data, which allows for optimal risk mitigation.

Umbra Fund believes that the stock market is efficient. We are not at all apprehensive towards the efficient market hypothesis; nevertheless, we believe that even though the market may be efficient, it is also ever changing. We are however apathetic towards placing importance on long-term stock forecasts. Within this ambiguous industry, people are tantalized by definite profits, which is inevitably followed by poor risk mitigation. We do not determine investment decisions primarily based on our own forecast; a stock’s risk is the foremost concern, always.

Selection Process

A financial objective is imperative when looking to invest. There are a plethora of investment methods that can be deployed to expedite one’s wealth within the stock market; however, deciding an investment methodology should come after determining a financial objective. Here are a few points in order to determine a financial objective:

  • The amount of risk permissible
  • The expected profit
  • The time willing to invest

When investing, instead of simply choosing the first security that has the probability of meeting your financial goal, it will be prudent to compose a list of securities that are considered to be capable of meeting that goal, and then with an investment methodology, determining which of the securities is the best option.

A stock’s perceived risk can vary strategy to strategy; there are a lot of investors that dismiss the risk entirely and focus primarily on the anticipated profit. Our strategy assesses the risk immediately because finding a stock with an adequate anticipated profit is quite easy. We believe that being right or wrong in the stock market is futile, our goal is to mitigate our loss so that it never matches our gain.

I infer a stock’s risk by using quantitative analysis; I then use qualitative, technical, and fundamental analysis to confirm my hypothesis formed through the initial analysis. From the analyses, I am able to deduce an approximate risk; if this risk is below the possible gain the stock will be monitored, and if the risk is above the possible gain it will be adjourned.

Just like a stock’s perceived risk, the perceived gain can vary strategy to strategy. Our goal is to find stocks that have a potential profit that accommodates well with the risk; this is so that if we’re wrong fifty percent of the time we are still profitable; for example, if we traded ten times, and lost five percent on five trades, but made ten percent on the other five trades, we would have made twenty-five percent. That is a simple way of explaining our methodology, but it explains it perfectly. The methods used to determine the potential gain of a stock is similar to the methods used for determining the risk, so describing our profit analysis will be tautological.

I define externalities as external variables that can affect a stock’s movement; this constitutes of information that is not directly linked to a company. Externalities are actually attached to a theory I have on the stock market, so it will be better to explain that theory.

People are inclined to view the stock market as an equation; perhaps, this is due to the numbers. There is a correct answer and a right answer when it comes to the stock market, two plus two, does indeed equate to four, it is the correct answer; however, there are times where it may not be the right answer. The majority of people do not really understand this part of the stock market and become upset when they make correct investment decisions but end up failing constantly. It is imperative to know the correct answer, but you must be able to adjust that answer for externalities. For example, if a teacher (an externality) assumes that all students should add by one, four wouldn’t be the right answer for two plus two; instead, the right answer would be five, it may not be the correct answer, but because of the externality (the teacher) it is the right answer. This approach must be applied to stocks, the process is more complicated of course, and this methodology will not prevent all losses, but understanding outward factors such as externalities is crucial in determining prudent investment decisions.

This is the simplest part of this process, the entering of the investment. If the four previous steps were assessed correctly, then this step should be done without apprehension. Emotions cannot affect whether or not an investment will be profitable; an investor can only make sure that their analysis was accurate.

Regardless of the investment success, a review process is mandatory. Reviewing is necessary for consistency and improvement, you can make money foolishly and lose money intelligently, a good investor must be able to distinguish this. You are only as smart as your next trade, a loss can be surmounted, and a profit can be relinquished.

Management Process

An investor must examine their financial objective thoroughly to manage an investment correctly. I achieve this examination by reflecting on three questions:

  • What is the financial objective?
  • What is the impetus to reach that financial objective?
  • What are the positive or negative connotations from that impetus?

Asking these questions allows for a precise management process.

As discussed in step one, to achieve a financial objective, an impetus must transpire to reach it. From a stock management perspective, I conclude this impetus to be an influx of volatility.

Volatility is perpetual; consequently, an investor may be misguided when analyzing for volatility. Evidence of this misguidance is prevalent by the multitude of technical indicators. At any given moment an indicator may suggest one conclusion while another is suggesting the contrary. That is why I consider that the most effective method to analyze a security’s volatility is by analyzing the security’s response to a catalyst. A catalyst is characterized as an event that causes substantial movement in a security’s price. When analyzing the volatility of a catalyst, I am able to discover patterns, which allows me to examine a security’s risk and return.

The largest time-consuming step of the investment management process is the administration of the stock placement. This step is accomplished by examining the investment’s historical and current volatility to ensure the financial objective is on course to being reached. Basic trend following of volatility is performed to effectively administer the stock placement. To actively invest in the stock market continual intra-day analysis is conducted. Due to having an outlined financial objective, and an anticipated risk or return, the process is uncomplicated; however, it is time intrusive.

Perhaps the most significant step when actively managing an investment is adjusting the investment’s risk and potential gain in accordance with the financial objective. It is paramount that gain is never taken solely for making a profit, but rather, due to being forced to sell because of the financial objective.

The final step is to evaluate whether or not the management was performed properly. It can be easy just to focus on the profits and losses, but reviewing whether or not the management could have been performed at a higher level is essential, yet it is a painful question to ask one’s self. Reviewing is necessary because it allows for adaptation and growth, which is needed to be effective in the financial industry.