Ballast’s foremost goal is preserving capital.
We define risk in absolute terms – losing money – rather than performance relative to a benchmark; a subtle but important distinction from our peers.
Because investment certainty is an illusion, risk control is embedded throughout our process. At the security level, each position has an explicit thesis with a valuation-based reward-to-risk estimate, which guides our tactical buy and sell decisions, and if violated results in immediate sale. Positions are sized by the reward-to-risk ratio, adjusted for portfolio interactions and aggregate exposures. We manage macroeconomic and other portfolio level risks using our Fundamental Risk Model, which enables us to control net exposures and rapidly react to unexpected events with full fundamental evidence.