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Philosophy & Process
Skilled Investors
One Team
Stable, talented, tested
Martingale’s innovative and collegial workplace attracts talented, seasoned investment professionals—many have worked together through numerous market and economic cycles. We merge their complementary skills and diverse experience into a single, cohesive investment team which is responsible for all of Martingale’s strategies. Investors have enough to worry about without the added headache of wondering whether their investment firm’s star portfolio manager will jump ship. Our team approach is designed to promote consistency and stability across accounts, across strategies and through time.
What else is a Martingale?
Mar•tin•gale (mär’ tən gāl), noun, Nautical
A rope or other stay running from a jib boom or bowsprit to the dolphin striker, the whole strengthening the bowsprit or jib boom against the force of the headstays.
Finding Alpha
Innovative Sources of Alpha
Markets can be messy and inefficient. Building on decades of experience, Martingale’s investment team researches the economic forces, behavioral biases and investor incentives that can drive share prices away from the fair value dictated by company fundamentals and risk. For the savvy, long-term investor, these transitory disruptions can present opportunities to profit. Martingale’s investment strategies seek to exploit these inefficiencies by identifying companies and industries with investment characteristics that our research indicates the market rewards over the long term.
What else is a Martingale?
Mar•tin•gale (mär’ tən gāl), noun, Mathematical
In probability theory of mathematics, a martingale is any stochastic process in which the conditional expectation of the next value in the sequence, given the current and preceding values, is the current value. Martingale stock price behavior models have replaced the random walk theory.
Building Portfolios
Risk Matters
Systematic implementation
Identifying attractively priced companies is only half the battle. For Martingale, the pursuit of alpha doesn’t occur in a vacuum—investment opportunities are carefully weighed against their contribution to the overall risk of the portfolio, measured as either absolute volatility or tracking error, depending upon the particular mandate. At the security level, portfolios are broadly diversified by design. Martingale’s systematic approach to stock valuation provides us with an informed opinion on thousands of companies. This allows us to avoid concentrated positions, thereby reducing the likelihood that any single holding or industry will meaningfully undermine portfolio performance. Most recently, our investment team’s pioneering research demonstrated that risk can provide the basis for alpha. Martingale’s low volatility portfolios, launched in 2008, exploit these insights.
What else is a Martingale?
Mar•tin•gale (mär’ tən gāl), noun, Equestrian
Part of the tack or harness of a horse, consisting of a strap that connects the girth to the noseband; used to steady or hold down the horse’s head.