Olympus Wealth Management 

Fund Overview

Explanation of Fund

 

Olympus Wealth Management was started in 2018 as an investment partnership for a group of individuals in Tulsa. Olympus primarily invests in undervalued small-cap companies located within the United States. Our investment decisions are based on a core set of fundamental principles that serve as the basis for all investments made by the fund. 

Investment Strategy

Our selection of securities for this fund is based on the premise that every stock, bond, or other security has an underlying value, which at times may differ from its price, and that purchasing the security at a price far less than its value will yield a positive result. In essence; we will purchase dollars for 40 cents. Our reasoning behind purchasing common stocks at no more than 40% of their intrinsic value is to incorporate a margin of safety into every investment decision.

 

If we value a stock at $100 per share and purchase the stock at $40 per share, even if the shares advance to only 60% of their intrinsic value ($60 per share), that will still deliver a 50% return on our investment. We take this approach with every investment decision made at Olympus and we further ensure our investment success by only purchasing stock in companies that we have a firm understanding of their business fundamentals.

 

When we value a company’s stock we want to ensure that our valuation is correct and then purchase the stock for a large discount from its value. Once profits are earned through one investment they will be reinvested as soon as another investment opportunity arises.

 

Make no mistake, these undervalued securities are in no way easy to find. Over a year of analyzing two to three thousand publicly traded companies we will be lucky to find 20-30 perfect investment opportunities.

 

Fortunately, 20-30 perfect investments is all that is needed to earn extremely high returns. 

 

The fund also engages in other investment strategies such as event arbitrage and the purchase of corporate bonds, however these investments are much less common than our investment in undervalued stock. 

Investment Principles

 

The decisions of our fund are based on a set of 6 unique principles that serve us in all of our investments:

Principle 1: An Investor Must Understand the Difference Between Investing and Speculating

There are two requirements for a security to be considered an investment: 1) A safety of principle 2) An adequate rate of return. If a security is lacking one of these requirements it cannot be considered an investment and should instead be classified as a speculation. In order to be successful, an investor must restrict themselves to securities consisting of both requirements.

Principle 2: An Investor Must Have the Right Temperament Towards the Market

An investor must be able to stay rational throughout the volatility that’s involved with financial markets. They must not feel influenced by the trends of the market or the reaction of others but should instead be able to think for themselves to make rational investment decisions.

Principle 3: An Investor Must View Stocks as Businesses

In order to be successful with investment, an investor must see a stock for what it actually is; which is a small piece of a business. An investor must therefore take the same approach to buying stock as they would in buying an entire business.

Principle 4: An Investor Must Understand that Every Stock has an Underlying Value.

The level of success an investor has depends on their ability to identify securities selling for less than they are worth. In order to do this however, an investor must understand that every stock has an underlying value which is based on the economics of the business. Once this is understood an investor can go through the process of valuing businesses and purchasing the stock of ones selling for far less than they are worth.

Principle 5: An Investor Must Have a Wide Margin of Safety.

Due to the uncertainties involved with purchasing marketable securities, an investor will greatly increase their chances of success if they incorporate a large enough margin of safety between a security’s price and value that even a mediocre sale will yield a favorable result.

Principle 6: An Investor Must Stay within their Circle of Competence.

In order to value a business, and henceforth identify ones selling below their value, an investor must have a high level of confidence in what the business is going to earn over the pursing years. Because of this, an investor dramatically improves their chances of success by staying within areas of business they feel they have a superior level of knowledge.

Management & Fees

The managing partner of the fund is William E. Douthat, a licensed investment advisor, who started the fund in 2018 and is responsible for making all investment decisions. William was involved with the startup of a financial software company helping people to manage their sales forecasts. After being involved with this startup William became licensed as an investment advisor by passing FINRA’s Series 65 Exam. He then went on to start Olympus Wealth Management in late 2018 and has managed the fund ever since. 

As a performance fee Olympus Wealth Management will retain 30% of all profits earned by the fund within a given year. Olympus Wealth Management will not charge a so-called “management fee” which is usually a 1-2% fee charged to investors irrespective of performance. We find this fee to be irrational and unfair to investors and Olympus maintains the notion that we should not receive payment unless we provide our investors with a positive return.

 

Performance

 

The performance of the fund will be measured based on the percentage increase of the fund assets during the calendar year and will then be reported back to all investors at year-end. Accompanied with the yearly performance of the fund will be a letter written by the managing partner describing what investments were made and how they impacted the overall performance.

The fund returned 10.97% in 2019. More detail about the fund’s performance can be found in our Letter to Investors. 

Minimum Investment

 

The minimum investment for anyone interested in joining the fund is $250,000. The process of joining the fund involves a discussion with the managing partner to ensure all members understand the activities of the fund and the principles on which these activities are based. 


For more information about becoming a member of our fund please send a message to contact@olympusw.com

Contact

Investment Principles

Stay up to date with Olympus Insights