While Black Cypress attempts to preserve capital, clients should understand that all investments pose a risk of loss. Clients should therefore be prepared to bear losses that coincide with fluctuations that come with investing in securities markets. Investors can lose money and can underperform other investment strategies.
Principal risks associated with our Long-Only Composite strategy and/or investing in general, include:
Risk of Loss: Securities investments are not guaranteed and you may lose money on your investments.
Risks for All Forms of Analysis: Our research and analysis primarily relies on the assumption of accurate and unbiased data provided by the companies whose securities we purchase and sell, proper oversight and regulation by US federal agencies, unbiased reviews by rating agencies, and dependable data from other publicly-available sources of information about these securities. While we are alert to indications that data may be incorrect, there is always a risk that our analysis may be compromised by inaccurate or misleading information.
General Market Risk: The market value of a security may move up or down, sometimes rapidly and unpredictably. These fluctuations may cause a security to be worth less than the price originally paid for it, or less than it was worth at an earlier time. Market risk may affect a single issuer, industry, sector of the economy or the market as a whole.
Equity Securities Risk: Equity (common stock) securities are subject to greater fluctuations in market value than other asset classes because of such factors as a company’s business performance, investor perceptions, stock market trends, and general economic conditions. Equity investments risk a loss of all or a substantial portion of the investment.
Concentration Risk: Our investment approach may have more volatility than a strategy that invests in a greater number of securities, as changes in the value of a single issuer’s security in our portfolio can have a more significant effect, either negative or positive, due to larger average position sizes. To the extent that our strategy invests its assets in the securities of fewer issuers, an account will be subject to greater risk of loss if any of those securities decreases in value or becomes permanently impaired. Our approach may focus on particular asset classes, industries, sectors, or specific companies. This may result in greater risks of adverse developments in such areas of focus than a strategy that is more broadly diversified across a wider variety of investments.
Manager Risk: Black Cypress’ opinion about the intrinsic worth of a company or security may be incorrect or the market may continue to undervalue the company or security. Black Cypress may not make timely purchases or sales of securities.
Database Error Risk: The investment strategies used by Black Cypress relies on proprietary databases and third-party data sources. Data may contain errors, as may the database system used to store such data. Any errors in the underlying data sources, data entry, or database may result in investment decisions based on incorrect information.
Artificial Intelligence Risk: AI-generated output may be incomplete, inaccurate, stale, biased, inconsistent, or misleading, and may omit important facts, context, or contrary information. Such output depends on the quality and completeness of the underlying data, the design and limitations of the relevant model, and the availability, reliability, and changing terms of third-party systems. In addition, changes in vendor models, data sources, access terms, or applicable law and regulation may reduce the usefulness of these tools or create operational, cybersecurity, confidentiality, and recordkeeping challenges. Although Black Cypress reviews AI-generated output as part of its research process, errors or limitations in such output may not always be identified. Accordingly, AI-generated content is treated as a preliminary input for further investigation and not as a substitute for independent research, fiduciary judgment, or portfolio decision-making.
Systems Risk: Black Cypress relies on computer programs and systems to implement its strategies, to trade, to monitor portfolios, and generate reports that are critical to the Firm’s activities. The programs or systems may be subject to certain defects, failures, or interruptions.
Interest Rate Risk: Debt security prices may decline due to rising interest rates. The price of debt securities with longer maturities is typically affected more by rising interest rates than the price of obligations with shorter maturities.
Credit Risk: An issuer or guarantor of a debt security may be unable or unwilling to make scheduled payments of interest and principal. Actual or perceived deterioration in an issuer’s or guarantor’s financial condition may affect a security’s value. Changes in credit spreads across markets can impact an investment in fixed income securities.