Leif Eriksen’s Performance with Protection model was designed with the goal of outperforming the market over the long run. But there’s more to the model than just that; Eriksen also attempts to protect capital by taking a top-down, fundamental approach and investing in high quality companies that have products or services that satisfy a macro trend like globalization or senior issues. This week, Eriksen added Calumet Specialty Products Partners LP (NASDAQ: CLMT) to his model. CLMT refines and processes specialty hydrocarbon products. They have many product lines including petroleum waxes, paraffinic oils, hydrocarbon gels and white mineral oils. The specialty refining business is highly specific and micro-focused, but extremely broad in application and results—meaning that many industries and products benefit from it. The company has low price to sale and book ratios and a dividend yield of 10.10 percent as of August 26, 2010. Their second quarter 2010 financials resulted in a net loss of $.9 million but that is significantly better than the $26 million loss they had during the second quarter of 2009.
Capital Ideas’ Macro Plus Income model has a five year time horizon and uses macro-economically focused proprietary models as well as the manager’s access to industry contacts to help make investment decisions. The securities the manager looks for are those that will allow for growth of principal and reinvestment of income. This week, Capital Ideas added iPath S&P 500 VIX Short-Term Futures ETN (VXX) to the model. VXX was designed to mirror the performance of the S&P 500 VIX Short-Term Futures Total Return Index with rolling long-term positions in futures contracts. On August 26, 2010 the fund was trading at a .06 percent premium to NAV.
