Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

ICMAX = Interpid Small Cap manager has lots of cash...Article reviews potential buys

edited August 2011 in Fund Discussions
Many stock funds have very little cash on hand right now to buy stocks "on sale". This is due in part to investors selling out of these stock funds drying up the "redemption cash" position that these funds hold. Also, few stock fund managers make holding cash a priority. ICMAX = Intrepid Small Cap has a 37% cash position right now. Do any of your mutual fund managers hold lots of cash?

From the article:

"Many managers wish they could be in Mark Travis' position. One of the funds he co-manages, Intrepid Small Cap (ICMAX) had a 37 percent cash stake as stocks sank this week. Other funds at Travis' company, Intrepid Capital Management, were 10 to 28 percent in cash.

When the Dow Jones industrial average plunged 635 points on Monday, Travis bought shares of Collective Brands — the operator of Payless ShoeSource stores — after they sank below $10 a share. They had traded around $22 in April, when Travis considered the stock too pricey. He kept an eye on it because he figures Payless' low prices will bolster sales in a tough economy.

Stocks like that are one of the reasons Travis and his co-managers rarely let their cash slip below 10 percent.

"If we had been fully invested on a day like Monday, it would have been next to impossible to sell one of our stocks so we could buy another that we liked better," Travis says.

Their tendency to keep plenty of cash has also helped limit losses when stocks fall — one of the reasons why three of Intrepid's four funds have 5-star ratings from Morningstar."

Anyone putting their cash (fund redemptions) to work with fund managers who hold higher cash positions?



  • Hi, bee!

    You might want to look at Aston River Road Independent Value (ARIVX), run by Eric Cinnamond. Cinnamond ran ICMAX for years and did a splendid job. Since starting the Independent Value fund, in the style of ICMAX, he has maintained a very high cash position and has substantially outperformed for their peer group and ICMAX.

    For what interest it holds,

  • Reply to @David_Snowball:
    Thanks David...this look worth checking out

  • Reply to @David_Snowball:

    Hi David. Your commentary on ARIVX swayed me to buy this fund last week. I sold my mid-cap fund, WTSLX, about a month ago when all this debt ceiling stuff started looking to be a good excuse for the market to correct. I was going to buy back into WTSLX after it dropped ~20% from when I sold. After reading your input on ARIVX, I decided to put that money back to work in Cinnamond's fund instead of going back into WTSLX. It is certainly a fund that allows you to sleep better at night.

    Thank you very much for the insight.
  • Reply to @MikeM: Hi, Mike. I hope it turns out to be a good addition, given your needs and style. It's certainly reassuring to see Eric putting up top percentile numbers for the month, quarter and YTD. As I noted elsewhere, he's also outperforming other cash-heavy funds so you can't simply say "well, of course, anyone sitting on that much cash is going to look good given the market."
  • I bought ARIVX in the downturn. Was my replacement for TMCGX that I sold earlier in the year.
Sign In or Register to comment.