A Different Way of Looking

Another intriguing theme that TIS has recently been developing: the death of mutual funds. Jeddeloh argues that average fund investors are demanding more flexibility, transparency, and liquidity; better tax efficiency; and lower fees. Open-ended mutual funds that don’t limit the number of shares they will issue “are simply unable to meet these demands,” a November TIS report concluded.  

Keeping it Lively

TIS has a staff of 10. Robert Lepley, TIS’s managing director, has more than 20 years of experience in biomedical re-search. Andrew Roalstad—portfolio manager, analyst, and head trader—specializes in the thematic research. Jeddeloh’s wife, Ann, and daughter, Sara, pitch in by handling administrative duties.

The firm grinds out two analytical books, typically about 60 pages, each month. One focuses on global markets, the other on U.S. markets. The books are packed with charts, graphs, and tables on exchange rates, indexes, economic indicators, stocks, bonds, and commodities. Once a quarter, the global book fattens up to include summaries of political and economic conditions in 20 countries.

The monthly reports cap off page after page of gravitas with a quirky joke section that includes “church bloopers”—recent examples of funny errors that appeared in church bulletins and programs:

• “Diana and David request your presents at their wedding.”

• “We are always happy to have you sue our facility.”

• “The ladies in the style show will meet with their dresses down in front after morning worship.”

Each weekday, TIS also e-mails investors a two-page market intelligence report, fresh with the firm’s latest takes on everything from the Fed’s latest moves to the impact of Venezuelan President Hugo Chavez’s policies on the Caracas Stock Exchange.

Swiss Beginnings

Jeddeloh got hooked on investing when he began reading the Wall Street Journal shortly before he graduated from the University of St. Thomas. “I just loved the market,” he says.

After graduating, he spent four years as a broker in Minneapolis, first at Dain Bosworth and later at Piper Jaffray. Then he joined the Leuthold Group, an institutional research firm in Minneapolis, where he became director of equity research. In the mid-1980s, Steve Leuthold sent him to London on a marketing expedition for his firm. “That’s when I caught the international bug,” Jeddeloh says.

He left Leuthold in 1989, finished up his MBA at St. Thomas, and headed for Zurich. Switzerland, which has prospered by becoming a center of international finance, is a small, landlocked nation. “You just start looking at the world differently when you’re in a situation like that,” Jeddeloh says. “You have to adopt a global viewpoint.”

At UBS, Jeddeloh saw government-run sovereign wealth funds in action years before many investment professionals had ever heard of them. These funds, which have grown explosively since then, are flush with cash reserves from oil exports. Jeddeloh says he was shocked to discover that Libya’s reserves are now roughly equal to the Fed’s.

Frontier Markets

Last year, TIS steered its clients through a wild investment climate. The equity exposure in its global portfolios ranged from below 25 percent to more than 75 percent.

The firm keeps up with the international markets partly by mining research data, much of it for free, on the Internet. Jeddeloh swaps information with investors and money managers in a global network that grew out of relationships he forged during his days in Switzerland.

TIS is focusing more on Eastern Europe and Russia. It is also looking more closely at “frontier markets,” such as Botswana. In 2007, Jeddeloh was out of the country for three and a half months. Teleconferences could reduce his rigorous travel schedule, but he fears such a move would weaken the face-to-face relationships so important to maintaining his ties with clients.

Instead, he expects to be spending even more time abroad, as his clients and potential investors overseas accumulate more assets. Indeed, if their assets keep growing at their recent pace, Larry Jeddeloh could be in the catbird seat for many more years.