Michael Oyster is the founder and CIO of https://oystercap.net/ (Oyster Capital), a multifaceted investment advisory organization dedicated to providing customized solutions for planners, advisors, investment managers and asset owners to assist in the achievement of all types of investment goals. Previously, Michael served as senior quantitative analyst with options advisory firm Schaeffer’s Investment Research conducting research on options, markets and behavioral metrics, as well as managing proprietary options-based investment strategies.

He joined investment advisory firm https://www.feg.com/ (Fund Evaluation Group) (FEG) in 1999, and began researching traditional and hedge fund managers as well as conducting topical research on markets and the economy. As FEG’s chief investment strategist, Michael served as a thought leader and frequent presenter on markets and the economy.

Michael is the author of countless papers as well as two books: Mission Possible, Achieving Outperformance in a Low-Return World, which was published by Dearborn Trade in 2005; and his new book, Success in a Low-Return World was published by Palgrave Macmillan in November 2018. Michael is a graduate of the https://www.uc.edu/ (University of Cincinnati) with a BBA in finance, a CFA charterholder, and a CAIA charterholder.

“Now I’m thinking this is the worst possible case scenario. And it really ended up being a terrible situation because everything that I had put into the portfolio that I thought was a terrific long term investment turned out to be absolute garbage.”

Michael Oyster

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Worst investment ever Portfolio chief has final say on what goes into investment packages In the middle of 2014, Michael was head of the portfolio management team at FEG, a very good group of talented people who advise institutional investors, and non-profit institutions, which are mostly endowments, foundations. His job at the time was to build portfolios for the clients that gave us discretion. Within a range of asset allocation targets, he and his team could build portfolios out of whatever investment ideas they thought were going to make the best return on investment with the least amount of risk. He was the primary investment person, part of a team, but he ultimately was responsible for the decision on what was the best for the portfolio.

Based on firm’s philosophy, portfolio is diversified well His firm believed: it should take a very long-term approach with investing; valuation criteria should drive investment decision, that portfolios should be built out of cheap investments, not expensive; and, in the importance of diversification in portfolio construction as it is a good risk mitigator that opens opportunities to other areas of the investment world that you might not otherwise consider. Philosophically, that is where Michael and his team were starting. At the time, his investment choices were diversified into such directions as domestic equities, international equities, emerging markets, many types of fixed income, commodities, master limited partnerships, and real estate investment trusts/

Expected win with big weight in cheap emerging market stocks Michael was satisfied. They had a large allocation to emerging markets, because in mid-2014, emerging markets stocks, relative to US stocks in particular, were about as cheap as they had ever been. They had a triple weight relative to targets in emerging markets, so they thought when things turn upward, it will be a big score and they will make a killing.

Suddenly, with US oil flooding global markets, the price collapses But then in the second half of 2014, something terrible happened for Michael’s portfolios. It was the beginning of the...