Lycos Asset Management Inc.

Common Sense Value Investing

Investment management can appear to be a complex and convoluted prospect. With many differing and contradicting schools of investment philosophy all self-lauded as the best, it can be a tricky thing to navigate, leaving many investors unable to articulate exactly how and where their money is invested.

Lycos Asset Management Inc. of Vancouver offers a welcome breath of fresh air amongst clouds of investment branches, providing proven, common sense investment advice. The investment advisory, asset management and hedge fund management firm are the trusted financial advisors of individuals and institutions who wish to invest in solid investment principals with a solid performance track record.

Constantine Lycos is President of Lycos Asset Management. Prior to founding the company, Lycos was a partner, portfolio manager, investment advisor, compliance officer and head of the investment committee at Chartwell Asset Management, where he was the lead manager of the Magna hedge funds.

He founded Lycos Asset Management in 2008 to distance from trend-driven, over-analyzed investment theories, and does so from a unique perspective. With a degree in mathematics from the University of London and a master’s degree in mathematical finance from Oxford University, Lycos specialized in derivatives and stock market volatility and understands investment theory better than almost anyone. This is the bedrock of his steadfast adherence to an investment philosophy that believes business ownership is the best means of wealth creation.

CBJ spoke to Lycos from his Vancouver office. “I use my quantitative investment background to better understand what other market participants are up to, and that can factor into decision-making particularly in the shorter term; why is something happening today the way it is?”

“The main principal is to buy good businesses at good prices,” Lycos explains. “Ignore the noise—do things that make sense by finding good businesses and buying into them when the price is right.”

“Innovation leads to productivity improvements that result in more goods being produced using the same amount of resources or the same amount of goods being produced with fewer resources. This translates into good profits for the beneficiaries of innovation, i.e., businesses.”

This philosophy is conservative and tempered and shields investors from vicissitudes in the market such as the tech bubble, which saw many accounts drop off the grid.

Lycos uses in-depth market analysis to deem a sound investment. “Strong balance sheets, good track record of consistent profitability and good future prospects. When you invest into a company you don’t buy the track record, you buy its future earnings. The trick is to identify them and buy into them at a reasonable price. This is a time-proven methodology and fundamental security analysis going back to Benjamin Graham (mentor to Warren Buffett).”

Lycos sticks to this philosophy because it pays dividends. In the first three years, Lycos Asset Management handled the MCI Index for the composite of all the client accounts. It also launched a fund that returned 27.5 per cent in 2011 when the world was negative, making it one of the top five funds out of 10,000 funds in Canada.