Sitka Capital Management

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JAG's picture
JAG
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Joined: Oct 26 2008
Posts: 2492
Sitka Capital Management

Does anyone have any experience with Sitka Capital Management? I believe Mish is an advisor for them, and though they have only been around since 2005, they have an excellent track record with a 9.3% Annulized Gain since their start. I read some of their client newsletters last night and was extremely impressed by their approach (very similar to Dr. Martenson's views on Gold, Peak Oil, Equities).

I'm considering moving my remaining "nest egg" to their management. Anyone have any opinions regarding their services or experience with them?

Thanks in advanced.

Denny Johnson's picture
Denny Johnson
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Joined: Aug 13 2008
Posts: 348
Re: Sitka Capital Management

Hi Jeff,

After watching the 'Mish at Google' video posted here recently, I've also developed an interest. Don't know, but have the impression that Mish is more than just an advisor, if so, I reckon that's a positive.

If I understand correctly, they have at least four funds,  http://www.sitkapacific.com/account_management.html

Looks like the HEDGED GROWTH fund has done consistently well since inception in June 2005. I like the looks of it. "Ideal for:  Investors seeking growth that is independent of the market."

I signed up for the monthly newsletter, but haven't contacted them for more detailed info as I'm happy managing my own money for now. But, am on the lookout for alternatives when it seems appropriate to get more diversity in what is now a heavy precious metal portfolio. Reckon I still have a lot of time.

Hopefully we'll get some feedback here from folks who have had experience w them. I found some of the comments from Euro Pac customers on another thread helpful.

edit: also like the looks of the ABSOLUTE RETURN fund

Denny Johnson's picture
Denny Johnson
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Posts: 348
Re: Sitka Capital Management

Jeff.......I just looked at Mish's article attacking Schiff, http://globaleconomicanalysis.blogspot.com/2009/01/peter-schiff-was-wron...

the last 25% of it is about SitkaPacific strategies, some of it not on the website.

JAG's picture
JAG
Status: Diamond Member (Offline)
Joined: Oct 26 2008
Posts: 2492
Re: Sitka Capital Management

 Denny,

I just heard back from Mish this morning about my inquiries and it looks like they charge a management fee of 1.75% and a .2% trading fee by the broker. Seems like a fair deal to me. Every aspect of their business and trading strategy seems extremely well thought out and very reasonable. There is a $50K minimum for the Hedged Growth Strategy and a $125K minimum for the Absolute Return Strategy.

From the latest figures, it looks like the short positions of the Hedged Growth Strategy are taking a pounding from the rebound in the Financial stocks (you know that won't last) so the strategy only had a 2.3% gain in 2009Q1. The Absolute Return currently has a 25% exposure to gold/ gold miner stocks, so its up 9.1% in the first quarter. I think I'm going to opt for a combination of the two strategies as I already have a decent allocation to gold/silver.

Bottomline: I very impressed with everything that I have learned so far about their service. I have researched the performances and advice of over 200 Financial Advisor Newsletters/Services so far this year, and SCM is by far a superior service in every regard. I can't believe it was under my nose all this time.

Thanks for your input.

Denny Johnson's picture
Denny Johnson
Status: Gold Member (Offline)
Joined: Aug 13 2008
Posts: 348
Re: Sitka Capital Management

Thanks Jeff............I share your opinion. Impressive performance thru good times and bad. Good to hear that the ABSOLUTE RETURN min is only 125, pdf read 250.

Do you know if there is anything prospectus like in print? Holdings, distributions, tax implications, etc, even if it's dated.

Reckon I'll be calling soon when my question list stops growing.

JAG's picture
JAG
Status: Diamond Member (Offline)
Joined: Oct 26 2008
Posts: 2492
Re: Sitka Capital Management

 Denny,

I haven't seen or received any prospectus or similar documentation as of yet. The most detailed reports that I have seen are from their site:

Some additional info from my inquiry:

Hedged Growth is a long short strategy ineligible for IRAs. It finished 2008 +13.7%. In contrast, the S&P was down about 38.5% on the year. Our performance comes from picking good stocks to own vs. good stocks to short. The chart shows good performance in both bear and bull markets.

 

Absolute Return, our other key strategy is IRA eligible, and at the moment has about a 25% exposure to gold and/or miners, a bit of energy, and a bit of foreign equities. The strategy ended 2008 +6.9%. When conditions warrant, we hedge this strategy with inverse index ETFs in the Russell, Nasdaq, and S&P. This hedging can change at any time based on market conditions.

 

Our Commodities Focus strategy is also IRA eligible but it is likely to be extremely volatile and is best suited for very long term horizons.

 

As of the end of the first quarter (March 31), Hedged Growth was up 2.3% and Absolute Return was up 9.1%.  The S&P 500 down 11.7% for the first quarter.

 

How Sitka Pacific differs from hedge funds and mutual funds.

 

·       We are not a hedge fund. 

·       We offer managed accounts. 

·       The accounts are in investors names.

·       Statements are from a brokerage house not us.

·       We cannot manipulate earnings because we do not produce the statements.

·       We have no access to investor funds. 

·       If someone sends us a check made out to us, we send it back. As a strict rule we never handle client money.

·       We have no exit penalties and no exit restrictions.

·       Someone can close their account for any reason at any time and can even do it without telling us. If you do not like how we are trading your account, you can close it. 

·       We do not use leverage. 

·       We often have high cash positions. 

·       Clients can see every trade we make. This is unlike hedge funds were no one can see anything, or mutual funds where all you would see is a monthly snapshot at the end of the month. 

·       We have trading rights to accounts, all other aspects of the account belong to the client.

·       Your account is not commingled with any other account.

We are the very opposite of hedge funds or mutual funds.

 

SIPC

 

Accounts are at Interactive Brokers (IB)

Each account at IB has $1/2 million in SIPC coverage and another $29.5 Million policy coverage at Lloyds of London. Those primarily pertain to theft so we must look beyond that and we do. IB holds short term cash positions in US treasuries, not SIVs or other questionable instruments. Furthermore, on securities that are lent out, IB requires 100% full cash collateral. This is extremely good protection from every angle that I can think of.

 

How Interactive Brokers Protects Its Customers and Protects Its Own Assets in Times of Market Turmoil

http://individuals.interactivebrokers.com/en/general/education/faqs/safetyFAQ.php?ib_entity=llc

 

More About IB

 

Let’s say we want to buy a 1% position in WMT for Hedged Growth strategy. IB totals up all the Hedged Growth assets and it buys WMT in one big block, then parses the shares out to each account (each account gets 1% of that account’s value). This is all automated so there are no errors and no account is first or last in line.

 

This is the best of all worlds

1) Complete transparency, clients see every trade

2) Account segregation

3) Low trading fees, block execution of trades with everyone treated equally

4) There are no errors, every account gets their shares

 

That is also why we cannot trade accounts elsewhere.

 

Fees

 

Management fees are 1.75% and are taken incrementally (a very tiny fraction of 1.75% each trading day). There no input fees, exit fees or exit restrictions. Trading fees are not marked up. We make no profit on them. Trading fees are approximately .2% annually. There are no fees other than management fees and trading fees. Interactive Brokers collects management fees nightly, on trading days.

 

Account Minimums

 

The minimum investment to open up an account in Hedged Growth is $50,000. The minimum for Absolute Return is $125,000.

 

To help you decide which strategy is right for you, please read the attached Sitka Pacific Strategy Comparison document!

 

Where possible, consider an allocation split between Hedged Growth and Absolute Return. However, SEC Rules dictate Hedged Growth is non-IRA only. The higher minimum for Absolute Return may also dictate strategy for small accounts.

 

If you would like to request an electronic application, I would be happy to send one. Please specify the strategy or strategies you are interested in.

 

If you still have questions, please drop me a line.

 

Thanks

Mish

 

 

Also he attached a Portfolio Comparison Document

 

When I get more info I will PM you. Thanks.

 

Denny Johnson's picture
Denny Johnson
Status: Gold Member (Offline)
Joined: Aug 13 2008
Posts: 348
Re: Sitka Capital Management

Thanks again Jeff.............if you learn anything new, I'd appreciate hearing about it.

NMNJGRL's picture
NMNJGRL
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Joined: May 23 2009
Posts: 20
Re: Sitka Capital Management

Thanks very much for this info!!  I was mulling over EuroPacific, but this gives another approach to look at...

NMNJGRL's picture
NMNJGRL
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Joined: May 23 2009
Posts: 20
Re: Sitka Capital Management

EuroPacific's management fee is sliding, but around 3.0% if you put in more than $200,000...the person I talked to basically suggested $300,000.  I'd have to look to see what the other side of the trade is...

Back in January they scrounged up a basic list of their areas of holdings....about a third in Canada, with about 9% in Australia, FInland, Switzerland and Germany with the rest in Japan, Hong Kong, NZ, SIngapore.

Utilities was their biggest sector, next was General Infrastructure, with REITS and AG, Water, Oil/Gas E &P, Transportation Infrastructure rounding off the list. Of course, this was back in January or so, so who knows what the approach is now.

The lower investment entry point at Sitka makes it a worthwhile thing to check out

 

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