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Portfolio > Portfolio Construction > Investment Strategies

U.S. Global's Frank Holmes Explains His CEO/CIO Style

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(San Antonio) After meeting face to face with U.S. Global Investors CEO and CIO Frank Holmes, you’ll likely have trouble remembering the Alamo. The Toronto native is a whirlwind of investment thoughts, management ideas and analytical tools, and he conducts business accordingly — even when spanning the globe.

Holmes bought a controlling stake in the San Antonio-based company he now leads in 1989. Today, two of U.S. Global’s 13 no-load mutual funds — U.S. Global Investors Gold Shares (USERX) and U.S. Global World Precious Mineral (UNWPX) — are among the five top-performing funds for the 52 weeks ended Nov. 2, according to Lipper.

It’s all in the “thought process” and how you analyze markets and investments from one week to the next. And, he adds, don’t forget the 80/20 rule: 80 percent of your gains will come from 20 percent of your holdings. But finding that 20 percent depends on more than just tapping into Holmes’ eclectic wisdom.

At U.S. Global Investors, research analysts meet on Monday to go through their top-down, macro analysis. On Fridays, it’s the micro, bottom-up analysis. And the results of this carefully formulated process is shared with some 30,000 investors via e-mail at the end of each week.

Sharing such content, says Holmes, means that U.S. Global doesn’t have to advertise. In addition, U.S. Global posts regular webcasts and podcasts on its website ( so investors can keep up with the latest market trends and investment strategies.

The content of these information sessions and weekly e-mail blasts stems from “grooming,” says Holmes. He works with his team of research analysts and executives to “use dynamic processes” in managing funds.

“I needed management models, just as I did investment models,” he explains. For some of this modeling, he’s turned to The Medici Effect by Frans Johansson, Investment Leadership by Jim Ware and Zap the Gaps by Ken Blanchard, Dana Robinson and Jim Robinson. He also relies on the decision-making technique invented by mathematician Thomas L. Saaty — analytical hierarchy processing.

And while these methods might strike some as cumbersome or unorthodox, the proof is in the pudding, according to Holmes. “I can leave, go on the road and know that the best practices are in place to cope with issues, relationships and more. It’s a sustainable formula for running a successful company.”


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