Strive to be less wrong, more often.

Returns in the asset markets are a function of future prices relative to current prices. Active investment management requires a "less wrong" forecast of future prices, and we believe there are two appropriate strategies to consider in an attempt to achieve this:

One strategy is to have a better forecast for the “news” that might influence future asset prices, where "news" refers to anything that matters to investors, such as earnings growth, new products, market share shifts, geopolitics, inflation, etc. Success with a "news-prediction" strategy requires an investor to develop a deep understanding of a particular structural change before it is fully reflected in the price of a stock or market sector.

A second strategy is to develop a better forecast for how asset prices might react to "news" after it occurs. Success with a “price-reaction” strategy requires an understanding of what kinds of news announcements and market conditions give rise to overshoot and/or mean reversion in different asset markets.

Either of these strategies, or a combination of the two, may be justifiable if asset prices overshoot their long term average values from time to time. Capital Advisors Funds employ both approaches.

Earnings growth is not a measure of the Fund's future performance.