Investment Philosophy & Structure

Investment Philosophy

At Ninety Plus we believe that active management paired with a methodical approach to portfolio structure and stock selection play a critical role in the implementation of a successful long-term strategy in the public equity market. Our innovative portfolio structure aims to mitigate market and sector risk while still capturing the benefits of a semi-concentrated portfolio at roughly 35 holdings. Additionally, our offensive stock selection methodology, which is driven by our proprietary 90+ Stock Ratings, and backed by our in-house research, aims to capitalize on the historic out-performance of high-achieving companies emerging from low-risk entry points. Ultimately, we believe the fusion of prudent portfolio composition and powerful stock selection results in a winning formula for achieving our investment objective.

Investment Structure

As stated above, our capital growth portfolio was engineered to neutralize market and sector risk yet still yield the advantages of a semi-concentrated, actively managed portfolio. Our comprehensive asset allocation is structured to be multi-faceted and is split into offensive and defensive tranches. Our offensive tranche is designed to generate outperformance versus our benchmark via pure stock selection and disciplined portfolio management, while our defensive tranche's intent is to mitigate market and sector risk by hedging against the most dominant stocks in our benchmark and diversifying our holding across the 11 sectors of the S&P 500.

Investment Process - Defensive & Offensive

Defensive Investment Process

Reverse Engineer Our Benchmark

At 90+ our largest competitor is our benchmark, the S&P 500. Thus, as active managers seeking outperformance, we believe it is imperitive to fully understand exactly what we are competiting against. Our defensive investment process begins with reverse engineering the S&P to uncover its internal makeup, strengths, and weaknesses. In doing so, one of our most insightful discoveries can be seen in the adjacent figure, which depicts the number of companies by weight and cumulative weight in the S&P. From this, we learned that while the S&P, as a whole, is comprised of roughly 500 companies, only 28 of them account for 50% of the index. Insights such as these are immensenly valuable and provide an edge in understanding how to position our benchmark hedge.

Hedge Against The Stalwarts

The second step in our defensive investment process is to neutralize market risk by identifying and hedging against the most influencial stocks in our benchmark. Our hedge position is periodically recalculated and rebalanced according to our defensive investment philosophy. 

Diversify Across Sectors

The third, and final, step in our defensive investment process is to eliminate sector risk by diversifing our offensive stock selections across the 11 S&P sectors. This ensures we maintain adequate expsosure in each sector and remain in sync with the cyclical nature of macroeconomic forces.

Offensive Investment Process (Buy Side)

Investable Universe

U.S. Public Equity Market

Our Fundamental Rating Identifies The Healthiest Stocks

Our 90+ Fundamental Rating evaluates each company’s quarterly, annual, and estimated earnings and revenues for acceleration, growth, and stability - assigning a percentile rating to each company in the investable universe. Our research shows that companies with strong and stable earnings and revenues growth outperform companies with weak or erratic earning and revenues growth over the intermediate to long-term. While our research suggests that stocks in the top quintile of our Fundamental Rating perform the best, in practice we prefer to set the bar even higher and narrow our focus to those in the top decile with Fundamental Ratings of 90 or higher.



Our Technical Rating Finds The Strongest Stocks

Our Technical Rating measures the price performance of each company against all other companies over the preceding 3, 6, and 12 months - assigning a percentile rating to each company in the investable universe. Our research shows that companies with proven track records of strong and consistent performance outperform companies with weak or inconsistent track records over the intermediate to long-term. Again, While our research suggests that stocks in the top quintile of our Technical Rating perform the best, in practice we prefer to set the bar even higher and narrow our focus to those in the top decile with Technical Ratings of 90 or higher.



Our Composite Rating Pinpoints The Most Promising Stocks

Our 90+ Composite Rating combines our Fundamental and Technical Ratings into one comprehensive number - assigning a percentile rating to each company in the investable universe. Our research shows that companies with a combination of healthy fundamentals and strong technicals significantly outperform companies lacking in one of these two critical areas. Again, While our research suggests that stocks in the top quintile of our Composite Rating perform the best, in practice we prefer to set the bar even higher and narrow our focus to those in the top decile with Composite Ratings of 90 or higher.



Our Launchpad Recognition Model Selects Stocks Primed To Advance

With our investment universe narrowed down to a pool of stocks that resemble historically powerful winners, our focus narrows to identifying those primed to advance and our launchpad detection model. Our model analyzes the price and volume structure of a stock searching for what we've termed "launchpads". Launchpads form during periods of dormancy in which we identify clues the stock is ready to move higher, such as; strong shareholders replacing weak shareholders, buying pressure exceeding selling pressure, and dampening volatility. Secondary findings from our research indicate that many of the greatest performing stocks all-time began their large scale advance from properly formed launchpads.



Offensive Investment Process (Sell Side)

Selling Into Gains

Offensive selling, or selling into unrealized gains, is our ideal scenario. Typically we hold our positions until we see selling pressure exceeding buying pressure and a reversal in the long-term trend. Our offensive selling criteria has been studied and tested over many stocks and market cycles and we believe knowing when to sell is equally as critical as knowing when to buy.

Selling Into Losses

Defensive selling, or selling into unrealized losses, is a vastly different dilemma. Capital losses work against the investor geometrically; that is, a 25% loss requires a 33% gain to breakeven and a 50% loss requires a whopping 100% gain to recoup your initial principle. The adjacent figure illustrates this geometric relationship between losses and gains necessary to breakeven and was a major "ah ha" moment for us in developing our sell side discipline. By ruthlessly cutting our losses at the critical level we mitigate our individual stock risk and safeguard our clients captial from unrecoverable drawdowns. 

Investment Research

90+ Fundamental Rating

90+ Technical Rating

90+ Composite Rating

Three years ago we set out to explore, isolate, and quantify the common characteristics of the greatest performing stocks of all time. In our pursuit, we identified three primary characteristics that the majority of super stocks share, and two secondary characteristics that further enhanced their future growth potential. As a result, our investment approach has predominantly been reverse engineered from our findings and developed in a manner to identify and construct a portfolio of such stocks in present time.


The primary findings of our study show that the majority of the greatest performing stocks of all-time had exceptional fundamental and technical characteristics before their major advance. Furthermore, we find that the combination of healthy fundamentals and strong technicals further amplify future returns. Additionally, the secondary findings of our studies show that a company's standing amongst its sector constituents, in terms of its fundamental and technical health, is also indicative of its future potential. And lastly, there exists an exploitable structural tendency of the market we call "launchpads" that many super-stocks formed before embarking upon their historic advance.


More specifically, our studies show that:

  1. Stocks with strong and stable earnings and revenues growth significantly outperform stock with weak or erratic earnings and revenues growth
  2. Stocks with strong prior relative performance significantly outperform stocks with weak relative price performance
  3. Stocks with a combination of strong and stable earnings and revenues growth and strong relative price performance were among the best performing stocks of all-time
  4. Stocks that are well positioned amongst their sector constituents significantly outperform weakly positioned stocks in the sector
  5. Launchpads provide low-risk entry points into super-stocks prior to their advance


Below we present a detailed summary of the primary findings from our multi-year research.

Our 90+ Fundamental Rating evaluates each company’s quarterly, annual, and estimated earnings and revenues for acceleration, growth, and stability - assigning a percentile rating to each company in the investable universe. Our research shows that companies with strong and stable earnings and revenues growth tend to outperform companies with weak or erratic earnings and revenues growth over our 20 year testing period. Furthermore, we see monotonically increasing performance from Q1 - Q5 suggesting that our Fundamental Rating is a efficacious discriminator of future price appreciation. Also, of note, is the relatively lower volatility and drawdown, and higher alpha and sharpe ratio among the top quintile indicating higher returns can be achieved with less overall risk. The figure below illustrates the 20 year back-test of our 90+ Fundamental Rating and further supports our findings and data above.

Our Technical Rating measures the price performance of each company against all other companies over the preceding 3, 6, and 12 months - assigning a percentile rating to each company in the investable universe. Our research shows that companies with proven track records of strong and consistent performance tend to outperform companies with weak or inconsistent track records over our 20 year testing period. Again, we see almost nearly monotonically increasing performance from Q1 - Q5 exhibiting that our Technical Rating is also an efficacious discriminator of future price appreciation. Again, of note, is the relatively lower volatility and drawdown and higher alpha and sharpe ratio among the top quintile indicating higher returns can be achieved with less overall risk. The figure below illustrates the 20 year back-test of our 90+ Technical Rating and further supports our findings and data above.

Lastly, our 90+ Composite Rating combines our Fundamental and Technical Ratings into one comprehensive number - assigning a percentile rating to each company in the investable universe. Our research shows that companies with a combination of healthy fundamentals and strong technicals significantly outperform companies lacking in one of these two critical areas over our 20-year testing period. Again, we continue to see monotonically increasing performance from Q1 - Q5 illuminating our Composite Rating's ability to separate strong from weak future performance. Again, of note, is the relatively lower volatility and drawdown and higher alpha and sharpe ratio among the top quintile indicating higher returns can be achieved with less overall risk. The figure to the right shows the 20 year back-test of our 90+ Composite Rating and further supports our findings and data above.