Knott Capital Management was founded on the philosophy of Capital Preservation . Research has proven that economic trends that are not fully discounted by the markets hold the keys to protecting principal and producing exceptional investment returns.
 
Our top down investment process is based on the ultimate arbiters of all investment outcomes: the economy and interest rates. We begin by creating an in-house macroeconomic forecast that incorporates a variety of inputs including: GDP, interest rates, Federal Reserve policy, inflation/deflation pressures, labor market studies, and productivity gains. This forecast allows us to both assess risk/reward relationships and further formulate our strategy.
 
Sector selection is a derivative of our macro-economic forecast. We overweight sectors whose fundamentals are more favored by macro view. Conversely we underweight or avoid industry groups that will be impaired by the prevailing forecast. Proper sector selection is the key to both protecting principal and capturing reward.
 
Individual security selection is made on a bottom up basis, incorporating in-house, independent and Wall Street sources. We look to identify companies within identified sectors that have superior products/services and business models, with pricing power and strong management teams. From a valuation perspective we invest in companies that trade at a reasonable multiple relative to their normalized growth rate, their sector peers and the market.