R U N N I N G H E A D E R 1

The Oxford Club

Alexander Green Chief Investment Strategist

Matthew Carr Emerging Trends Strategist

Andrew Snyder Editorial Director

Amanda Heckman Assistant Editorial Director

Rachel Gearhart Managing Editor

Alex Moschina Managing Editor

Anne Mathews Assistant Editor

Allison Brickell Editorial Assistant

Alison Kassimir Senior Graphic Designer

Chelsea Centineo Graphic Designer

James Boxley Cooke Honorary Chairman Baltimore, Maryland

Julia Guth CEO & Executive Director

Laura Cadden Associate Publisher

Chris Matthai Director of Research

Ryan Fitzwater Senior Research Analyst

Steven King Event Director

Nathan Hurd Director of VIP Trading Services

Dear Member,

Peter Lynch is the most successful equity fund manager in history. As the head of the Fidelity Magellan Fund from 1977 to 1990, he generated a 29.2% average annual return.

When your money compounds at that rate, it doubles every 2 1/2 years. During his tenure at the Magellan Fund, assets under management grew from $18 million to more than $14 billion.

Following this remarkable run, Lynch retired. Yet he continued to emphasize his no-nonsense investment approach in numerous books and articles.

As a young man starting out in the money management business 30 years ago, I was pro-foundly influenced by Lynch’s philosophy. In fact, much of it underpins The Oxford Club’s own approach today.

This month I’m recommending a stock that Peter Lynch would love.

The company’s iconic brands have worldwide name recognition. The firm is racking up billions in global sales, and its markets are still expanding. Yet its business prospects are wholly unappreciated. And the stock – which is trading at the bottom end of its range – is sitting on the bargain-basement table.

That’s why it’s the newest addition to our Oxford Trading Portfolio.

An Elite Ranking2015 was not a banner year for most investors.

The Dow and the S&P 500 were flat. And developed foreign market and emerging market indexes fell.

High-yield bonds were down. And so were inflation-adjusted Treasurys.

Commodity investors fared even worse. Gold declined for the third consecutive year. Silver fell 13%. Copper ended the year down 25%. Platinum sank 26%. Brent oil, the global crude benchmark, dropped 36%. And iron ore plunged 43%.

ALEXANDER GREEN

WITH ALEXANDER GR REENWITH ALEXANDER GREEN

GREAT PROFITS IN THE COMPANY OF GOOD FRIENDS | FEBRUARY 1, 2016, VOLUME 29, NO. 2

Peter Lynch Is the Greatest Fund Manager of All Time... And He Would Love This Stock

M E M O F R O M T H E C H I E F 2

Yet our investment portfolios prevailed again. In December, the independent Hulbert Financial Digest named us to its elite list of the top 10 investment letters in the country – yet again – for our 15-year performance.

True, we suffered a few losses last year. But those were small and contained.

Meanwhile, we are sitting on substantial gains in our Oxford Trading Portfolio, including on many names we added only last year, such as Laboratory Corp. (NYSE: LH), Pilgrim’s Pride (Nasdaq: PPC), Ryanair (Nasdaq: RYAAY), Sovran Self Storage (NYSE: SSS) and Tyler Technologies (NYSE: TYL).

2016 has gotten off to a rocky start and is likely to be another challeng-ing year.

As I’ve written before, history shows that late in a bull market, investors should favor larger cap stocks over smaller ones, growth stocks over value stocks, and dividend payers over nondividend payers.

PVH Corp. (NYSE: PVH) qualifies on all three counts. And while you may not be familiar with the name, you and your family are almost certainly customers.

Peter Lynch would appreciate that. After all, his success came from evaluating businesses, not out-guessing the market. As he often pointed out...

• Stocks aren’t lottery tickets. There is a company attached to every ticker symbol.

• Know what you own and why you own it.

• If you’re going to invest in a company, you ought to be able to explain why in simple language that a fifth-grader could understand.

• Follow the earnings. What a stock does today, tomorrow or next week is only a distraction.

As for market timing, in his best-seller One Up on

Wall Street, he wrote...

Thousands of experts study overbought indicators, oversold indicators, head-and-shoulder patterns, put-call ratios, the Fed’s policy on money supply, foreign investment, the movement of the constel-lations through the heavens, and the moss on oak trees, and they can’t predict the markets with any useful consistency, any more than the gizzard squeezers could tell the Roman emperors when the Huns would attack.

Words don’t get much plainer than that. And they underscore the folly of all those amateurs out there trying their best to divine “what the market will do next.”

One piece of Lynch advice I’ve found particu-larly easy to follow is this: Investigate the businesses you patronize yourself. After all, if you’re a

customer you ought to at least consider becoming a shareholder.

With that in mind, take a look inside your closet. Do you see any labels that say Calvin Klein, Tommy Hilfiger, Van Heusen, Izod, Arrow, Warner’s, Speedo or Olga? If so, take a closer look at PVH.

Iconic Brands on SaleOver 130 years old and based in New York City, PVH is one of the world’s largest apparel compa-nies. The company’s more than 30,000 associates sell its iconic brands through retail stores, discount outlets, wholesale channels and websites in more than 40 countries.

The company was transformed through its acquisi-tions of Calvin Klein in 2003, Tommy Hilfiger in 2010 and Warnaco – which controls Calvin Klein’s two largest apparel categories, jeans and underwear – in 2013.

Since the Calvin Klein and Tommy Hilfiger brands represent more than three-quarters of the business,

“Investigate the businesses you patronize

yourself. After all, if you’re a customer you ought to

at least consider becoming a shareholder.”

M E M O F R O M T H E C H I E F 3

let’s take a closer look at these two.

Calvin Klein offers a range of products at a wide variety of price points, from men’s and women’s apparel to eyewear, watches and jewelry.

Its primary divisions are the Calvin Klein Collection (its highest-end designer clothing and accessories), Calvin Klein Platinum (its “bridge” brand of fashion items sold through specialty and department stores), Calvin Klein White Label (its “better” brand of lower-priced apparel and footwear), Calvin Klein Jeans (its iconic denim offerings) and Calvin Klein Underwear (includ-ing pajamas and loungewear). Global sales top $8 billion a year.

Tommy Hilfiger is another internationally rec-ognized brand that celebrates classic styles and preppy designs. The focus here is on 25- to 40-year-old consumers and includes tailored clothing, sportswear, denim, footwear and accesso-ries. Annual sales here top $7 billion.

You may have noticed, however, that clothing retailers themselves have not enjoyed the best of times recently.

Gap, which once ruled the retail world, is closing a quarter of its stores and laying off hundreds of workers. J.Crew fired 10% of the workers at its cor-porate headquarters last year. Abercrombie & Fitch and Aéropostale are seeing sales, profits and margins shrink – and are closing hundreds of stores.

And the big retailers – like Macy’s, Nordstrom and Dillard’s – are struggling too.

But a few key facts may help put things in per-spective:

1. Many shoppers have simply switched from brick-and-mortar stores to the Internet.

2. Annual garment sales – at more than $2 trillion – are still rising.

3. The world population is growing by 75 million people a year.

4. Discretionary income is increasing in the world’s emerging markets, home to 85% of the world’s population and 90% of those under 30.

5. Industry research shows these newly affluent consumers are drawn to the cachet of global brands.

PVH understands this. Fifteen years ago, its sales came almost exclusively from North America. Today it owns significant businesses in Europe, Latin America and Asia. These regions already represent more than 20% of its annual operating income. They will be a much larger part in the years ahead.

Shares of PVH have struggled mightily over the past year. From a 52-week high of $129, the stock has plunged more than 40%. The sell-off acceler-ated in the fourth quarter after PVH reported mostly flat earnings and merely confirmed near-term guidance.

Yet management beat consensus earnings esti-mates in each of the last four quarters. The stock is cheap at just 1.3 times book value and only 11 times the 2016 earnings consensus. And I believe that estimate – at just $6.69 a share – is too con-servative. PVH earnings will be at least a dollar a share higher.

This is not a complicated story.

PVH owns iconic brands that will continue to sell well in world markets. The stock is inexpensive and selling at a steep discount to the S&P 500. And sentiment toward the stock is far too pessimistic.

In short, I don’t know whether Peter Lynch owns this stock himself. But if he doesn’t, he should.

Action to Take: Buy PVH Corp. (NYSE: PVH) at market. And use our customary 25% trailing stop to protect your principal and your profits. n

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Price to Earnings

38.31% Discount

PVH Corp. Trading at a Discount

PVH Corp. S&P 500

A Tech Trend Going Sky-High in 2016

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Technology was king in 2015.

The sector had the best performers of the year, led by “new economy” stocks, such as Amazon.com (Nasdaq: AMZN), Netflix (Nasdaq: NFLX) and Expedia (Nasdaq: EXPE).

Technology stocks pushed the Nasdaq higher and helped stem the tide of lower returns on the S&P 500. And as I’ll prove, many of the best-performing stocks of the past year have had something in common. They’ve all been part of a major trend.

It’s a trend that won’t abate in 2016. It’ll grow more quickly and ever larger as a greater number of companies embrace it.

There’s an important migration taking place. Investors will find opportunities to score big in the year ahead in what has been one of the fastest-growing industries over the past several years.

Let me start with a simple word used to describe a very complex thing...

We All Have Our Heads in the CloudMost people have an idea of what the “cloud” means, but they can’t really describe it. It’s every-where and nowhere all at once.

Simply put, the cloud is the Internet.

And whether you like it or not, we’re a part of the cloud every day.

As I wrote recently in our Members-only newslet-ter Oxford Insight, the cloud – or on-demand com-

puting or converged infrastructure – simply means your device is using programs that aren’t housed locally (on your hard drive).

Instead, it uses the Internet to access the necessary information. When you store data in the cloud, it’s actually being stored on a third party’s server.

Cloud storage has been a boon for not only indi-viduals, but also businesses.

My Insight piece explains it:

The upfront infrastructure costs of data storage for a business are largely erased. You don’t need to build your own server farm, or enterprise resource management or customer resource man-agement platform.

You simply hire another company to house your data or you subscribe to that company’s software, which you access via the Web.

When you stream a movie on Netflix, you’re using cloud computing. Netflix has partnered with Amazon’s Web Services platform to allow millions of users to access and view content. Thousands of servers and terabytes of storage are instantly available.

A slew of Members sent me notes after we pub-lished that piece in December. The overwhelm-ing response was that readers were intrigued and even fascinated by the idea of the cloud... but they weren’t quite sure how to invest in it.

With that in mind, let’s dig in.

A Booming BusinessThere are many cloud businesses you may be

Matthew Carr, Emerging Trends Strategist, The Oxford Club

MATTHEW CARR

Editorial Note: As The Oxford Club’s Emerging Trends Strategist, Matthew has made it his mission to find the most prof-itable trends in the markets and help Members take advantage of them. This month, he has his eye on a major change happening right now in the technology sector. Read on to find out how you can take advantage of this profitable trend.

M A R K E T - B E A T I N G T R E N D S 5

familiar with...

Apple’s (Nasdaq: AAPL) iCloud is cloud storage. Your data – photos, music, etc. – is stored on a third-party server. But you’re able to access it with any device in the Apple ecosystem that connects to your iCloud.

Microsoft’s (Nasdaq: MSFT) Office Online suite is a form of cloud computing. Its OneDrive is cloud storage built into Windows 8 and above.

There’s also Google’s (Nasdaq: GOOG) Drive.

Salesforce.com (NYSE: CRM) is the leader in business enterprise cloud computing solutions.

When we compare the 2015 performance of these companies’ shares to the shares of old-school tech and data storage companies, such as IBM (NYSE: IBM), EMC Corp. (NYSE: EMC), Teradata (NYSE: TDC) and Brocade Communications (Nasdaq: BRCD), we see a pronounced difference.

The new-school cloud-storage companies blew the more traditional storage companies out of the water.

These cloud-based companies had double-digit gains (and triple-digit gains for Amazon) for the year, while the others saw double-digit losses.

EMC, Teradata and Brocade provide traditional data storage solutions, which have fallen out of favor, much like their share prices.

In a highly digital world, the need for more data storage is booming. This need is growing exponen-tially, at a compound annual growth rate of 50%.

But as the price for cloud storage falls, fewer and fewer businesses turn to traditional storage options. Instead, they take the plunge into the virtual, benefiting cloud storage providers.

For example, Amazon’s Web Services segment is the company’s fastest-growing and most profitable business.

As traditional storage providers make the transi-tion to cloud-based offerings, the demand for these services will help boost results.

Here’s what I mean... In the first three quarters of 2015, EMC’s revenue declined 3.4%. But in the third quarter, revenue grew 1%, as, for the first time ever, its new storage products – cloud storage, converged infrastructure, software-defined storage, etc. – accounted for more than half of all its strate-gic storage business.

EMC’s Emerging Storage segment revenue grew 27% in the third quarter, offsetting declines in its traditional information infrastructure.

We’re at the Tipping PointWhen it comes to the opportunity for investors in this industry, the numbers speak for themselves.

In 2008, the global cloud computing market was $5.6 billion. By 2014, this had increased tenfold to $56.6 billion. And by 2018, it will double to $127.5 billion.

Also by 2018, 62% of all customer relationship management software will be cloud-based.

By 2019, cloud applications will account for 90% of mobile data traffic. More impressive, mobile cloud traffic will increase elevenfold – a compound annual growth rate of 60% – from 2014 to 2019.

If you want to benefit from outsized returns in 2016, keep an eye on companies that provide cloud-based services.

These stocks outperformed the market in 2015. There’s no reason they won’t do it again in 2016.

We are at a tipping point for many companies in this industry. And the floodgates are about to open. n

125%100%75%50%25%0%

-25%-50%

Heading for the Clouds

Sept '15Jun '15

Mar '15Dec '15

n Salesforce.com n Amazon n Microsoft n Google n IBM n EMC Corp. n Teradata n Brocade Communications

Is It Time for Investors to Panic?Alexander Green, Chief Investment Strategist, The Oxford Club

6S P E C I A L C O M M E N T A R Y

Talk about an inauspicious start...

The market stumbled out of the gate this year like a drunk leaving his favorite saloon at closing time. Virtually every sector is down. So are most overseas markets.

Many market pundits now claim this is it, the beginning of the long-awaited bear market. Is it time to panic?

Of course not.

Panicking is for when a toddler in your charge suddenly darts into the street. It has no place in portfolio management.

Let’s do a reality check here.

Trees don’t grow to the sky and stocks don’t rally in perpetuity. History shows that every bull market is followed by a bear market.

And that’s okay, because every bear market is followed by another bull market. The market’s long-term trend is higher highs and higher lows.

Almost without excep-tion, the folks proclaim-ing the end is nigh have a long history of making similar predictions. And all they have to show for it – aside from a complete inability to feel embarrassment – is the yolk running down their faces.

As Vanguard founder John Bogle often notes, there are two types of market timers: those who don’t know what they’re doing and those who don’t know they don’t know what they’re doing.

Remember that the next time you hear some

CNBC contributor confidently pronouncing what the market is likely to do next.

Given the uncertainty inherent in financial markets, what does a sophisticated investor do?

1. He makes a workable plan in advance.

2. He responds unemotionally to market volatility.

3. He sticks to his discipline.

Take a long-term investor, for example. He knows that bull and bear markets are a fact of life. So he sets an asset allocation and sticks with it. That means every year he sells down the assets that have appreciated the most and adds to those that lagged the most.

(Again, I’m referring to asset classes – equities, bonds, real estate invest-ment trusts, Treasury inflation-protected secu-rities, etc. – not indi-vidual stocks. You most definitely should NOT add to the worst stocks in your portfolio.)

Rebalancing doesn’t just reduce portfolio volatility. It forces you to sell what’s high and buy what’s low. That gooses annual returns.

A short-term trader, on the other hand, uses a different sell discipline. In the case of The Oxford Club, it means using trailing stops. That protects your profits in the good times and your principal in the bad.

However, you must actually implement them instead of simply imagining you will. Some inves-tors so detest taking small, short-term losses that they end up with big, long-term losses instead.

“History shows that every bull market is followed

by a bear market. And that’s okay, because

every bear market is followed by another

bull market.”

S P E C I A L C O M M E N T A R Y

Not good.

Occasional losses are a fact of life. That means you must be capable of acting resolutely and unemotionally.

If you can’t do this, you may need to turn your portfolio management over to a trustworthy, low-cost investment pro. (As Harry Callahan famously said, “A man’s got to know his limita-tions.”)

Understand that I’m not suggesting you shouldn’t feel emotional occasionally. That’s too much to ask of flesh-and-blood human beings when finan-

cial markets come unbound from time to time, as they will.

But you can’t act on those emotions and expect to prosper.

It may seem simplistic to some that you need only have a workable plan, respond unemotionally and stick to your discipline.

But history demonstrates that the key to long-term investment success is not doing something abso-lutely brilliant.

It’s not doing something terribly foolish. n

7

“Make a Workable Plan... and Stick to It.”The Oxford Club’s 18th Annual Investment U Conference

April 13-16, 2016 | Park Hyatt Aviara | Carlsbad, California

It seems like every time we browse the Internet or open a newspaper these days, we’re flooded with doom-and-gloom headlines...

“Stocks close out worst year since 1931...” “Dow has worst four-day start to a year on record...” “Warren Buffett faces worst year on stock market since 2009...”

When we’re living in such an irrational environment, it’s hard to be rational.

But, as Alex writes, we must remember that even though history shows us that every bull market is followed by a bear market – it’s okay. Because every bear market is followed by another bull market. And the market’s long-term trend is higher highs and higher lows.

At our 18th Annual Investment U Conference, a top-notch team of more than two dozen world-class financial experts will unveil their predictions for where you can collect the biggest and safest profits in 2016.

This is your chance to hear exclusive insights and recommendations from The Oxford Club’s own Alexander Green, Marc Lichtenfeld, David Fessler, Sean Brodrick, Matthew Carr and Steve McDonald – as well as several noted guest speakers, such as Jim Rickards, Stacey Asher, Karim Rahemtulla, Marin Katusa, John Hofmeister, Dan Ferris and Rick Rule.

For all the exciting details on what our experts plan to reveal, please visit our event website at www.investmentuconference.com.

The Oxford Portfolioby Alexander Green

REVIEW

The market has suffered quite a shakeout over the last several weeks. Yet our shares of Pilgrim’s Pride (Nasdaq: PPC) are up 17% since we got in two months ago.

It’s true that three out of four stocks move with the market. But if a company’s business prospects remain the same – or improve – the shares will hold firm or push higher.

That’s what is happening here.

Roughly 60 billion chickens are slaughtered for meat annually. But that number will increase dra-matically in the years ahead.

Why? Two factors... The first is a steady increase in the world’s population. Protein is an essential component of the human diet, providing cells with amino acids that the body can’t produce on its own.

(Yes, nuts and vegetables provide some of them. But only animal proteins deliver them all.)

At current consumption rates, the world will need to generate 501 million tons of meat annually by 2050, when the global population will reach approx-imately 9.7 billion, up from 7.3 billion today.

The second factor is an increase in affluence. History demonstrates that consumers eat more meat as their incomes rise. (For example, while the world population doubled over the last 50 years, meat consumption nearly quadrupled.)

Chicken is likely to remain the entrée of choice. Its mild flavor and broad cultural and religious acceptance make it more popular than beef or pork. Poultry is also cheaper to produce and requires less land.

The Food and Agriculture Organization of the United Nations estimates that chicken will overtake pork as the world’s most-consumed meat within four years.

Even in beef-loving Argentina, per-capital poultry consumption was up 8% last year, while beef con-sumption was down 6%.

This trend will only accelerate now that the World Health Organization (WHO) has officially clas-sified processed meat as a Group 1 carcinogen, meaning the quality of the evidence firmly links it to cancer, and red meat as a Group 2 carcinogen, meaning it likely causes cancer.

Based in Greeley, Colorado, Pilgrim’s Pride is the world’s second-largest poultry producer. It works with more than 4,000 family farms throughout the U.S. and Mexico, processing more than 34 million birds a week for a total of more than 7 billion pounds of chicken annually.

It sells fresh and prepared chicken products to dis-tributors, supermarkets, restaurants and food pro-cessors in more than 95 countries. The company enjoys $8.3 billion in annual sales.

Yet the stock is a bargain, currently trading for less than eight times earnings and just two-thirds of annual sales. And I see those sales strengthening in the months ahead.

The average American currently consumes 71.1 pounds of red meat a year. (The category includes beef, lamb, veal, goat and pork.) But the WHO report will motivate them to eat less of it.

Then there are the company’s new cost-reduction programs. Higher sales combined with lower expenses will cause earnings per share to easily exceed expectations in the months ahead.

Bottom line? The rising world population and coming adjustment in American eating habits will boost sales. New operating efficiencies will reduce costs. Combine these with an attractive valuation and a solid financial position and you have a com-pelling, lower-risk opportunity.

Bucking the Market TrendLately there has been a lot of negative press about the so-called “earnings recession.”

An economic recession is characterized by two consecutive quarters of negative GDP growth. An earnings recession is characterized by two consecu-

tive quarters of declining corporate profits.

However, most of the weak earnings over the last two quarters have been in one sector: energy. That’s not surprising given that both oil and natural gas prices have moved sharply lower over the past year and a half.

Problems in the oil patch, however, are creating a bonanza for the thousands of companies that thrive on lower energy prices. Moreover, there are plenty of firms that are posting strong results in this earnings season.

Take Sovran Self Storage (NYSE: SSS) for example. In the most recent quarter, its net income jumped 23% on a 12% increase in revenue. And earnings are likely to move substantially higher in the months ahead.

Based in Buffalo, New York, Sovran owns and operates more than 500 self-storage facilities encom-passing more than 30 million square feet. Its stores operate under the trade name Uncle Bob’s Self Storage, serving over a quarter of a million custom-ers in 25 states.

Over the last few years, Sovran has achieved record-high revenue growth, occupancy levels and funds from operations. Much of this has come through acquisitions. It has also invested heavily in its systems and its stores.

As net income has grown, so has the dividend. Our shares currently yield 3.417%.

The company’s current focus is high-end, third-gen-eration properties. These are high-tech (more than 70% of its customers use the Internet at some point in the rental process) and temperature controlled, with modern amenities such as security systems and 24-hour access.

CEO Dave Rogers says his key metric is 1 million. Once a metropolitan area hits this population level, it becomes profitable for Sovran to set up shop.

It doesn’t matter what the economy is doing or how the stock market is performing. Once the firm taps into a population of 1 million people or more, the numbers always seem to come out right.

Demand is driven by what industry experts call The

Four D’s: death, divorce, disaster and dislocation. As people move – or their life circumstances change – they often require storage facilities.

Nearly 10% of American households currently rent a self-storage unit, a 65% increase from 15 years ago.

Yet the top five self-storage companies – four of them real estate investment trusts – own, operate and manage only 12% of all U.S. facilities. They will continue to gobble up private companies and mom-and-pop operators in the years ahead.

Sovran has acquired 125 stores over the last 3 1/2 years. That has helped it expand in core markets like Florida, Texas and the mid-Atlantic states. And management insists more acquisitions are in store.

Our shares of Sovran are up 18% since we got in nine months ago. (The S&P 500 is down 4% over the same period.)

Expect the trust to earn $5.52 this year – and for the share price to maintain its positive trend.

Gaining RespectI spend a lot of time covering the recommenda-tions in our Oxford Trading Portfolio. Our All-Star Portfolio gets less attention, although it shouldn’t.

True, it contains just seven investment selections versus the more than two dozen in the Trading Portfolio.

But those seven recommendations are run by some of the world’s leading money managers: Warren Buffett, Carl Icahn, Mark Mobius, David Dreman and Sam Zell.

None of these gentlemen needs a public rela-tions agent. Their audited track records speak for themselves.

There may be other managers who have done better in the short run or in a particular type of market. But these guys have delivered the goods again and again, over the long haul and through several market cycles.

So when in the July Communiqué I recommended Markel Corp. (NYSE: MKL) as “the next Berkshire

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P O R T F O L I O R E V I E W 10

Hathaway,” I raised a few eyebrows... and heard from more than a few skeptical Members.

No doubt they are less skeptical now.

In the first seven months, the stock is up more than 80 points. So let’s take a closer look at what is hap-pening here.

Like Berkshire Hathaway, Markel is a holding company with substantial interests in insurance and reinsurance.

Co-President and Chief Investment Officer Tom Gayner is in charge of investing Markel’s float. (The float is the funds provided by policyholders that are held prior to the company making claim payments.)

He notes that the firm’s insurance operations are so consistently profitable that cash has flowed into his portfolio every single month since he joined the company in 1990.

Markel has a market cap of approximately $12 billion. Roughly 60% of this represents the firm’s insurance operations. The other 40% is attributable to an equity portfolio run by Gayner.

Like Buffett – and Benjamin Graham before him – Gayner likes profitable businesses with low debt, compelling valuations, great management and plenty of opportunities to reinvest future profits.

Some of his major holdings include CarMax, Walgreens, Brookfield Asset Management, Disney, Diageo, Marriott International, Home Depot, Deere & Co., UnitedHealth, UPS, Archer Daniels Midland and Unilever.

He tends to let his winners run a very long time. That keeps taxes low. With a 35% tax rate, he says, “if I sell, I have to invest the proceeds, and I’m rein-vesting $0.65 on the dollar. That makes the hurdle for switching a lot higher.”

Many asset managers with his skills demand hefty fees. Hedge fund operators, for example, often take a 2% annual management fee in addition to 20% of net profits. But Markel’s costs are so low that Gayner manages its $4.5 billion stock portfolio for less than 0.01% in annual expenses.

That’s not just cheaper than most exchange-traded

funds or Vanguard funds. It’s one-seventieth the cost of the average U.S. stock mutual fund.

How about that high share price? That is no obstacle. It’s only a small fraction of the $200,000 price that Berkshire brings. And you’d hardly call Berkshire a disappointment. Our B shares have more than tripled.

Yet, since we added Markel to our portfolio, Gayner hasn’t just matched Buffett’s performance. He’s easily exceeded it. Expect further outperfor-mance in 2016.

WuXi Goes PrivateAnd lastly, remember Victor Kiam?

He was the ubiquitous CEO – and TV pitchman – of Remington Products who famously said he liked the company’s shaver so much he “bought the company.”

A few weeks ago, something similar occurred with WuXi PharmaTech (NYSE: WX), a firm we added to our Oxford Trading Portfolio two years ago.

Based in Shanghai, WuXi helps biotech companies lessen the time and costs required to get medical devices and drugs to market.

Fourteen years ago, the company had four founders and a single 7,000-square-foot laboratory. Today it has more than 7,000 employees and more than 3 million square feet of laboratory and manufacturing space in the U.S and China.

Last year, co-founder and CEO Dr. Ge Li proposed that a group of company executives – in partner-ship with Boyu Capital, Temasek Life Sciences, Hillhouse Capital and Ping An Insurance – take the company private.

It was put to a vote in November and sharehold-ers overwhelmingly approved the deal. As you may have noticed, the company’s shares quit trading on the New York Stock Exchange in December.

You should have received $46 per share (or, tech-nically, ADS, as these are American depositary shares), less a $0.05 ADS cancellation fee. Our original entry price was $36.07. So your net return on this one is 27.4%. n

P O R T F O L I O S , F E B R U A R Y 2 0 1 6 11

THE OXFORD TRADING PORTFOLIO An active and diversified portfolio of the market’s most compelling opportunities.

COMPANY/SYMBOL REC. DATE REC. PRICE CURR. PRICE RATING TRAILING STOP TOTAL GAINS

BB&T (NYSE: BBT) Sep-11 $19.79 $33.72 Buy $30.77 90.8%

Cerner Corp. (Nasdaq: CERN) Jan-12 $28.87 $58.33 Hold $56.25 102.0%

Check Point Software Technologies Ltd. (Nasdaq: CHKP)

May-14 $66.96 $76.95 Buy $66.02 14.9%

Diageo PLC (NYSE: DEO) Mar-09 $49.80 $105.27 Buy $93.99 151.1%

D.R. Horton (NYSE: DHI) Jul-13 $21.31 $27.24 Buy $24.77 30.0%

Fleetmatics Group (NYSE: FLTX) Aug-15 $45.82 $46.67 Sell $46.31 1.9%

Gilead Sciences (Nasdaq: GILD)† Jun-14 $80.80 $92.54 Hold $90.91 16.1%

Intrexon Corp. (NYSE: XON) Jan-16 $29.56 $23.40 Sell $24.73 -20.8%

iShares MSCI Emerging Markets Fund (NYSE: EEM)

Nov-15 $35.94 $29.25 Buy $26.80 -17.2%

Laboratory Corp. of America (NYSE: LH) Oct-15 $118.29 $111.77 Buy $93.99 -5.5%

Luxottica (NYSE: LUX) Nov-12 $37.88 $62.52 Buy $55.46 77.1%

Owens & Minor Inc. (NYSE: OMI)† Nov-09 $28.65 $33.26 Buy $29.06 35.3%

Philip Morris Int’l (NYSE: PM) Mar-09 $35.63 $88.31 Buy $67.02 210.3%

Pilgrim's Pride (Nasdaq: PPC) Dec-15 $18.67 $23.57 Buy $17.81 26.3%

PVH Corp. (NYSE: PVH) Feb-16 New New Buy 25% TS

Roche Holding AG (OTC: RHHBY)† Dec-13 $34.98 $32.52 Buy $28.84 -1.0%

Ryanair (Nasdaq: RYAAY) ADR Jun-15 $69.74 $85.90 Buy $65.73 25.6%

Sovran Self Storage (NYSE: SSS) May-15 $91.95 $109.64 Buy $82.50 21.9%

Stericycle Inc. (Nasdaq: SRCL)† Jun-11 $91.56 $116.31 Hold $113.13 27.0%

Target (NYSE: TGT) Mar-14 $56.62 $71.64 Buy $62.81 32.9%

TJX Companies (NYSE: TJX) May-12 $41.09 $67.69 Buy $57.42 70.5%

Toyota Motor Corp. (NYSE: TM) Feb-12 $67.85 $114.99 Hold $105.98 85.5%

Tyler Technologies (NYSE: TYL)† Sep-15 $141.96 $157.50 Buy $135.46 11.0%

WisdomTree Japan Small Cap (NYSE: DFJ) Feb-10 $39.90 $53.31 Buy $43.33 46.7%

WuXi PharmaTech (NYSE: WX) Jan-14 $36.07 $45.95 Taken

Private$34.42 27.4%

* The All-Star managers make “Buy” and “Sell” decisions within these securities themselves. We do not use trailing stops here.

* This strategy requires annual rebalancing and does not require the use of trailing stops. These prices do not reflect dividends.

† These stocks belong to the Escape Hatch Portfolio. To learn more and to view the portfolio (including the ETF equivalents of the Vanguard mutual funds), visit www.oxfordclub.com/escape-hatch.

Prices as of 1/13/16 | Note: For the absolute latest updates on all of The Oxford Communiqué’s portfolios – including the Trading, All-Star and Gone Fishin’ – visit our website at www.oxfordclub.com.

The Oxford Club, LLC provides its Members with unique opportunities to build and protect wealth globally under all market conditions. We believe the advice presented to Members in our published resources and at our seminars is the best and most useful to global investors today. The recommendations and analysis presented is for the exclusive use of Members. Members should be aware that investment markets have inherent risks and there can be no guarantee of future profits. Likewise, past performance does not secure future results. Recommendations are subject to change at any time, so Members are encouraged to make regular use of our website, www.oxfordclub.com.

© 2016, The Oxford Club, LLC I 105 W. Monument St., Baltimore, MD 21201 I 800.992.0205

PublisherChief Investment StrategistChief Income StrategistEmerging Trends StrategistEditorial Director

Julia GuthAlexander GreenMarc LichtenfeldMatthew CarrAndrew Snyder

Assistant Editorial DirectorAssistant EditorEvent DirectorDirector of ResearchSenior Graphic Designer

Amanda HeckmanAnne MathewsSteven KingChris MatthaiAlison Kassimir

Protected by copyright laws of the United States and international treaties. This newsletter may only be used pursuant to the membership agreement and any reproduction, copying or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of The Oxford Club, LLC. Information contained herein is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. You and your family are entitled to review and act on any recommendations made in this document. The Oxford Club expressly forbids its writers from having a financial interest in any security they recommend to their readers. All Oxford Club employees and agents must wait 24 hours after an Internet publication and 72 hours after a publication is mailed before taking action on an initial recommendation. The Oxford Club does not act as an investment advisor, or advocate the purchase or sale of any security investment. Investments recommended in this newsletter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Basic dues for subscribers to The Oxford Communiqué (USPS 008-575) are $149 a year. The issue is published monthly by The Oxford Club, LLC, 105 W. Monument Street, Baltimore, MD 21201. Non-U.S. dues are higher and vary from country to country. Periodicals’ Postage Paid at Baltimore, MD and additional mailing offices. POSTMASTER: Send address changes to The Oxford Communiqué, 105 W. Monument Street, Baltimore, MD 21201. For questions regarding the status of your mem-bership, call Member Services at 443.353.4056. Our website is: www.oxfordclub.com.

THE OXFORD ALL-STAR PORTFOLIO A diversified basket of funds and holding companies managed by some of the world’s top-performing money managers.

COMPANY/SYMBOL REC. DATE REC. PRICE CURR. PRICE RATING TRAILING STOP TOTAL GAINS

Berkshire Hathaway B Shares (NYSE: BRK-B)† Jan-01 $44.58 $126.25 Buy None 183.2%

Dreman Contrarian Small Cap (Nasdaq: DRSVX)

Jul-09 $12.80 $16.39 Buy None 102.7%

Equity Residential (NYSE: EQR) Jul-01 $28.05 $79.17 Buy None 272.7%

Icahn Enterprises (Nasdaq: IEP) Nov-13 $93.16 $56.83 Buy None -24.8%

Markel Corp. (NYSE: MKL)† Jul-15 $789.45 $839.56 Buy None 6.4%

Templeton Dragon Fund (NYSE: TDF) May-02 $9.20 $15.73 Buy None 350.6%

Templeton Emerg. Mkts. Fd. (NYSE: EMF) Jan-02 $8.80 $9.09 Buy None 193.3%

THE GONE FISHIN ’ PORTFOLIO A simple but sophisticated long-term investment system based on a Nobel Prize-winning strategy.

COMPANY/SYMBOL REC. DATE REC. PRICE CURR. PRICE RATING ALLOCATION TOTAL GAINS

Vanguard Small Cap Index (NAESX) Apr-03 $15.12 $47.73 Buy 15% 253.3%

Vanguard Total Stock Mkt. Index (VTSMX) Apr-03 $19.59 $46.73 Buy 15% 178.2%

Vanguard Emerg. Mkt. Index (VEIEX) Apr-03 $7.26 $18.85 Buy 10% 245.7%

Vanguard Europ. Stock Index (VEURX) Apr-03 $14.89 $25.09 Buy 10% 149.3%

Vanguard High-Yield Corp. Fund (VWEHX) Apr-03 $6.02 $5.48 Buy 10% 77.3%

Vanguard Inflation-Protected Securities Fund (VIPSX)†

Apr-03 $12.09 $12.91 Buy 10% 55.2%

Vanguard Pacific Stock Index (VPACX) Apr-03 $5.56 $10.04 Buy 10% 136.6%

Vanguard Short-Term Investment (VFSTX)† Apr-03 $10.82 $10.60 Buy 10% 40.9%

Vanguard Prec. Metals & Mining (VGPMX)† Apr-03 $9.98 $5.99 Buy 5% 141.1%

Vanguard REIT Index (VGSIX) Apr-03 $12.08 $25.32 Buy 5% 203.1%