The basic premise of a S.W.O.T. analysis is to gain a better understanding of whether a business will succeed or fail based on the internal and external forces that may impact it.
Inasmuch as it can be all too easy to be self-congratulatory, we believe Cymbria’s strengths far outweigh its negatives. We would have never launched Cymbria and committed so much of our own money to it if we thought otherwise. Our reality check is that we also pay close attention to threats to our business and do what we can to remedy our shortcomings.
Proven track record: Time and again, we’ve made investors money
Repeatable investment approach: You get a collection of our best ideas based on our proprietary insights. When it comes to having an idea about a business that isn’t widely shared by others, you either have one or you don’t
Owning EdgePoint: Cymbria gets to participate in EdgePoint’s growth and dividends
Potential to buy Cymbria at a discount to NAV: Because Cymbria’s price is market determined it can trade below NAV, creating opportunities for astute investors
Share buybacks: If done at an attractive price, they increase the ownership stakes of remaining shareholders and can boost their returns. Like getting something for nothing
Lower fees: Cymbria’s MER is relatively low and still on the decline. Take that all of you run-of-the-mill global equity funds!
Alignment of interests: Our personal financial stake in Cymbria and EdgePoint Portfolios is significant, amounting to over $101 million*
Committed partnerships: We own Cymbria and we’re not going anywhere, period. Our shareholders are also in it for the long term, with 81%* of those who we can track having held Cymbria since the beginning
Regular and honest communication: We actively educate investors and their advisors about Cymbria and believe we enjoy a better shareholder base as a result
Security selection: Cymbria is a collection of our best business ideas based on the proprietary insights of our Investment team
Permanent pool of capital: Cymbria can never be forced to sell to fund redemptions; likewise, its growth is performance driven and independent of inflows
Investment flexibility: Thanks to its unique structure, Cymbria enjoys a large universe of investment choices
Reinvested cash flows: We reinvest gains and income from Cymbria’s portfolio to enhance your returns
Liquidity Realization Opportunity (LRO): To diminish liquidity constraints, the LRO can offer the option to redeem Cymbria shares at a price close to NAV
No analyst coverage: Cymbria “flies under the radar”. (Truth be told, we prefer this). However, broader research would help investors be more familiar with Cymbria
Lack of liquidity: Transacting a large number of Cymbria shares without moving its price can prove difficult and may take several days, if not longer
Potential to sell Cymbria at a discount to NAV: Because Cymbria’s price is market determined it can trade below NAV, potentially hurting returns for uninformed investors
EdgePoint’s illiquidity: EdgePoint is a private company and as it grows, so does its weight within Cymbria. Of course, we have no intention of selling EdgePoint
Potential to lose money: Cymbria’s value isn’t guaranteed nor is it a risk-free investment
Key-man risk: Although our investment approach is easy to understand and repeatable, by definition outstanding investment talent isn’t easy to find
No distributions payout: Right now Cymbria reinvests its distributions rather than paying them out. If you own Cymbria for a dividend, you’ll likely be disappointed
Bad rap: Although this isn’t the case with Cymbria, closed-end funds are generally seen as a poor investment vehicle because they tend to trade at a discount to NAV
Go-anywhere portfolio: Cymbria has the freedom to invest in all market-capitalization sizes, across all geographies and in private companies, and can use leverage and issue equity. It’s not limited to just stocks
Appealing structure: Cymbria’s uniqueness helps to attract investment talent and investors alike
Popularity of passive investing: The more money that pours into index funds, the less investors are thinking about business fundamentals, to Cymbria’s advantage
Short-termism: The market’s excessive focus on short-term results provides us with long-term investment opportunities, one of the many benefits of having proprietary insights that look out more than five years
Concentrated ownership: Cymbria’s relatively small shareholder base makes transacting shares more challenging
Negative regulatory changes: We can only track and be prepared to respond to new rules about how we run our business. Ultimately, it’s not up to us
Negative tax changes: The government giveth…and the government taketh away!
Buying yesterday’s story: Investors may make unreasonable assumptions about Cymbria’s future growth based on its past performance