It has been a long while since an IPO has generated the amount of discussion and speculation as we have seen with last month’s Facebook launch. So much so that it seems to be the topic of conversation at cocktail parties, the health club and the golf course.
Fortunately for M3AG, we haven’t spent a lot of time thinking about the investment merits of a Facebook investment. Our Rules Based Investing® philosophy is intended to reduce the emotional aspect of investing. In other words, if Facebook, or any other stock, were to surface through our investment process as a “buy” it would take its rightful place in the portfolio. To date it has not and we don’t anticipate seeing it for quite a while.
However, for the pure intellectual exercise (and for cocktail banter) we put Facebook through the investment strategy we employ for the M3 All-Cap Equity strategy. The M3 All-Cap Equity strategy uses three different rule sets designed to deliver 15 stocks each to the portfolio, resulting in a total portfolio of 45 positions. Each rule set follows a disciplined process based on complimentary company and market factors. The resulting portfolio is generally diversified by industry and market capitalization.