Momentum Investing

There are many types of investing styles out there, value, growth, GARP(growth at a reasonable price), trend-following, etc..  And there are many interpretations of each one of those styles as to how their implemented.  For the methodology we use, momentum investing is probably the most accurate style.

The following quote is from Richard Driehause, of Driehaus Capital Management, and is a good summary of why we use momentum:

"Perhaps the best known investment paradigm is buy low, sell high.  I believe that more money can be made buying high and selling at even higher prices.  I try to buy stocks that have already had good price moves, that are often making new highs and that have positive relative strength.  These are stocks that are in demand by other investors.  What is the risk?  Obviously, the risk is that I'm buying near the top.  But, I would rather be invested in a stock that is increasing in price and take the risk that it may begin to decline than invest in a stock that is already in a decline and try to guess when it will turn around."