Wow

The other day I wrote a post that included a reference to an OEF managed by the Kelmoore Investment Company. As a coincidence there was an article written by someone from Kelmoore at Marketwatch.com. The firm has created a super hero named Kaptain Kelmoore to help teach people about personal finance and investing. Seriously.

It turns out Kelmoore manages three funds that total about $450 million. There is the Strategy Fund (KSOIX), the Eagle Fund (KSECX) and the Liberty Fund (KSCLX). KSOIX buys large cap stocks and sell calls against those stocks. Eagle buys mid caps and large caps and sells calls. KSCLX buys large cap stocks, sells calls and buys puts with some of the premium (this strategy is called a collar).

The performance of these funds has been bad. KSOIX has lagged its category and the S+P 500 four years in a row. KSECX has lagged both four out of the last five years. KSLCX has lagged four of the last five years. Ouch.

I have written several times that most managers beat the market some of the time and lag the market some of the time. That just makes sense, doesn't it? Maybe these guys are the exception that proves the rule.

Looking at the current holdings they have made some poor choices with stock selection, really poor.

I'm not sure how they still have assets in the funds. They also have a separate account business. How can they get anyone to hire them or stay with them? "So tell me a little about your performance."

"Um, er, well..."

Truly fascinating.