GEGC employs a disciplined approach for more established small-cap growth companies and a system for investing in truly emerging growth stocks that have limited historical records but are on the verge of significant growth. GEGC's managment has helped pioneer what is popularly being called today, Fusion Analysis, for over 30 years in managing equity portfolios. The portfolio manager, John Palicka CFA CMT also teaches Fusion Analysis as an academic course at leading learning institutions and asset management firms. This analysis blends the use of three criteria in selecting stocks: fundamental quant screens, qualitative judgements, and quant technical/behavioral analysis factors.These criteria are applied to publicly-traded companies which have relatively small market caps ( usually under $500-million and much smaller in some countries). This provides a short list of candidate companies from which GEGC may choose for possible investment. Further details are provided below.

Financial Characteristics In Our Companies Include

• Unique companies that are one of a kind or leaders. They are highly profitable with good margins and ROEs.
• Strong balance sheets with LT Debt/Cap under 50% and they can tap the capital markets to finance growth.
• Attractively priced by constraining the expected P/E ratio relative to the overall market level ( generally 125% at time of purchase) or to a projected growth rate (greater than the expected P/E/ ratio ) in the case of emerging growth companies. In general, companies should show minimum growth rates of 15%.
• Capacity for self financing based on good cash flows.

Our Strategy Includes:

• Mostly bottoms-up philosophy as we attempt to select the most promising companies within each country.
• Little or no FX hedging. Little or no market-timing decisions,hence low cash levels.
• The portfolio is diversified among at least ten industry groups and at least 40 stocks for larger accounts requiring more diversification.
• At least 20% of the portfolio can have foreign stocks in at least three countries.
• Moderate or low portfolio turnover is anticipated on a seasoned portfolio as GEGC seeks long-term capital appreciation and minimizes transaction costs.

Methods of Operation

• Use cyber-quant expert systems that develop and run data base screens to provide ideas.
• Work with investment boutiques that specialize in global small-cap ideas.
• Analyze foreign and domestic financial statements.
• Communicate with managements and attend analyst seminars and company meetings.

Fees And Administration

• Fees are negotiable based on size of assets but around 1% per annum. No load or exit fees.
• Advisory agreement to manage the portfolio which shall be housed in an international investment firm.
• Regular daily online statements priced in U.S. dollars.
• Trades mostly done in U.S. dollars.
• Custody held by client or in client's brokerage house/custodian.
• Proxy voting at discretion of client.
• GEGC does not pay soft dollars for brokerage services. Directing commissions to brokerage firms for customer referrals has always been prohibited, as well as "pay and play" agreements with consultants. GEGC does not spend much time and expense on marketing in order to keep its expenses low. Hence it can better pass along performance to clients.
• The minimum account size is $10,000,000

Last modified on Sunday, October 02, 2011