SAM is a Delaware limited liability company formed on December 21, 2011. SAM succeeded to the business and operations of Signalert Corporation and Appel Asset Management Corp., both formerly SEC-registered investment advisers. SAM is owned by Appel Asset Management Corp. and by SAM's President, Marvin Appel. Appel Asset Management Corp. is owned by Marvin Appel. SAM provides discretionary investment advisory services to individuals and high net worth individuals (including their retirement accounts), small-business retirement plans, charitable organizations and SAM Risk Managed Fund LLC, a multi-series Delaware Limited Liability Company (“SRM Fund”) (collectively, “Clients”) based on the philosophy of actively managing Client accounts by frequently reviewing market conditions and Client holdings. Whenever SAM judges that a change in market conditions would warrant a change in a Client’s portfolio, SAM will make that change on a Client’s behalf.

SAM serves as the managing member to the SRM Fund. The SRM Fund has multiple separate segregated portfolio series (collectively, the “Funds” and each individually a “Fund”). The Funds have one common operating agreement and offering memorandum. However, each Fund (1) is treated as a separate partnership for federal income tax and other legal purposes, (2) has its own specific investment objectives and strategies that apply only to the members of that Fund, (3) has separate assets and liabilities that will be legally segregated from the assets and liabilities of each other Fund, (4) maintains separate books and records and is independently audited, and (5) generates its own annual tax filing information. Information about the SRM Fund including information about each Fund’s investment strategies, fees, risks and other material information, is contained in the offering memorandum and the supplements to the memorandum for each Fund (collectively, the “Memorandum”).

At the start of SAM’s relationship with a Client, SAM will get to know the Client’s goals, financial situation and ability to bear investment risk. Based on that understanding, SAM will recommend an investment program. Once the Client and SAM agree on a suitable program for the Client, SAM operates with investment discretion, which means that SAM will not ask for approval for each transaction. Clients are not constrained to model portfolios, allowing SAM to accommodate reasonable preferences that an individual Client may have.

Decisions that SAM makes on an ongoing basis for Clients (as well as investors in each Fund) include selecting which areas of the stock and bond markets in which to invest, and determining how much allocation to cash or exposure to each of these areas is suitable for them. At any given time, the holdings in each Client’s portfolio will depend on the Client’s ability to bear investment risk and profit objectives and on SAM’s assessment of prevailing market conditions. In general, more conservative Clients will have less exposure to the stock market than more aggressive Clients, and their stock market holdings will be of a less volatile nature. Conversely, more conservative Clients will generally have greater exposure to the bond market compared to more aggressive Clients. SAM’s Clients hold open-end mutual funds (both equity and bond), exchange-traded funds (“ETFs”) as well as individual publicly traded stocks (common and preferred) and bonds (Treasury, corporate, municipal) in their accounts. Utilizing these vehicles, SAM aims to gain exposure to any area of the market SAM judges to be suitable and offering good opportunities to each Client. Clients may have exposure at different times to U.S. equities, foreign equities in both developed and emerging markets, high-yield bonds, investment-grade bonds, commodities, foreign currencies or real estate investment trusts. Generally, SAM does not invest Client assets in privately traded securities and will not invest in any private security for a Client without specific authorization from the Client to make such an investment.

SAM also manages a number of Client accounts in variable annuities, where SAM utilizes the selection of stock and bond mutual funds available to the Client within the annuity.

SAM provides advisory services to its Clients based on their respective investment objectives and guidelines. The investment objectives and guidelines for each Fund are set forth in the Memorandum while separately managed account Clients provide their guidelines orally or Client guidelines are contained in account proposals prepared by SAM for such Clients.

In addition to its discretionary investment advisory services, SAM publishes an online investment newsletter entitled, “Systems and Forecasts” for paying subscribers. Systems and Forecasts is published on a bi-weekly basis, 24 issues per year with weekly email market updates issued by SAM to Systems and Forecasts subscribers in-between issues.

SAM’s recommendations to Clients and Systems and Forecasts subscribers is generally limited to liquid and available securities.

As of December 31, 2019, SAM managed approximately $283,400,000 in regulatory assets under management on a discretionary basis. please register to get more info

SAM’s standard management fees for individual discretionary Client accounts are between 1%- 2% subject to negotiation. The agreed upon fees depend on a variety of factors including, but not limited to, the complexity and/or size of such Client’s account and the history of such Client’s relationship with SAM. SAM’s fees could be higher than those of other investment advisers providing comparable services to Clients. Investment advisory fees for the management of accounts are billed in arrears at the end of each quarter and are prorated for assets deposited or withdrawn in the middle. Clients may elect to have their fees paid directly from their accounts or to pay the fees from other sources. To the extent that Clients invest in mutual funds or ETFs, the Clients also pay the expenses of these vehicles. The impact of mutual fund or ETF expense ratios is reflected in their investment performance. SAM attempts to invest Clients only into mutual funds and ETFs whose potential investment performance warrants incurring the expense ratio. In addition, Clients whose accounts trade in options pay transaction costs to options brokers at various rates. SAM attempts to negotiate the most favorable rates for its Clients. In its capacity as investment adviser to Funds, SAM charges management fees ranging from 1.5% to 2.0% of assets annually (0.375%-0.5% per quarter, billed in arrears), depending on the nature and methodology of the Fund. Fees and other material terms regarding an investment in a particular Fund are set forth in such Fund's Memorandum.

Clients in variable annuities must also pay the insurance company’s mortality benefit and expense ratio, in addition to the expenses of the mutual funds offered within each annuity.

Systems and Forecasts subscribers pay annual subscription fees, generally $99 per year. This fee is occasionally reduced or eliminated during special promotions or at the discretion of SAM, and free trial subscriptions are available. If a subscriber cancels his or her subscription before the end of the subscription period, he or she will receive a pro-rata refund of the subscription fee based on the amount of time remaining in the period.

Each Client has the right to terminate its advisory agreement with SAM upon written notice as set forth in such Client’s advisory agreement. Upon termination of any Client account, any prepaid, unearned fees will be promptly refunded and any earned, unpaid fees will be due and payable. Withdrawals or redemptions by investors in a Fund can be made on the terms described in the Fund’s Memorandum.

SAM’s fees do not include brokerage and transaction fees, costs and charges, and other related costs and expenses that will be incurred by Clients regarding the trading and maintenance of Client accounts. Clients will incur certain charges imposed by custodians, brokers and other third parties such as commissions, custodial fees, and other fees and taxes on brokerage accounts and securities transactions. Such charges, fees and commissions are exclusive of and in addition to SAM’s fees, and SAM does not receive any portion of these commissions, fees, and costs. Mutual funds and ETFs also charge investment management fees, which are disclosed in a mutual fund’s prospectus. Such charges, fees and commissions are exclusive of and in addition to SAM’s fee, and SAM does not receive any portion of these commissions, fees, and costs. SAM does not receive any sales commissions or referral fees from any source. Item 12 describes the factors that SAM considers in selecting broker-dealers for Client transactions and determining the reasonableness of their compensation (e.g., commissions). please register to get more info

SAM does not charge any performance-based fees (fees based on a share of capital gains or capital appreciation of the assets of a Client). However, different Clients pay different amounts of management fees. Charging different levels of asset-based fees, creates conflicts of interest. SAM has an incentive to favor those accounts that pay us a greater management fee over those accounts that pay SAM a lesser management fee because SAM will receive greater compensation by doing so. Nonetheless, SAM seeks to treat all Clients in a fair and equitable manner at all times, and SAM will act in a manner that it believes to be in the best interests of all of its Clients. To that end, SAM has established a variety of policies and other controls regarding allocation of investment opportunities, including those seeking to manage the conflicts of interest identified in this Item 6. Please see Item 11 below for more information about our allocation policies. please register to get more info

SAM provides discretionary investment advisory services to individuals (including their retirement accounts and high net worth individuals), small-business retirement plans, charitable organizations and the Funds. The minimum account size depends on the investment program. SAM generally does not accept investments of less than $50,000 in a Fund, nor for less than $200,000 for an individual account. please register to get more info

SAM utilizes a multi-disciplined investment approach that relies on technical analysis (i.e., the use of market behavior to assess whether future market conditions are likely to be favorable or risky). SAM’s main sources of information include market statistics, stock and mutual fund price data that are available online and in print, financial newspapers and magazines, research materials prepared by others, timing services, annual reports, prospectuses, and filings with the SEC. There are two overall goals of SAM’s analysis: 1. To determine how much exposure to the stock or bond market is potentially optimal for each Client, given SAM’s assessment of prevailing market conditions and the Client’s financial situation. 2. To determine which areas of the stock and bond markets offer the best potential balance between risks and rewards (taking into account risk factors described in more detail below). SAM’s trading strategy involves periodic movements of Client assets between risky holdings and the money market, and among different areas of the stock and bond markets, based primarily on proprietary models that utilize technical analysis to detect turning points within the securities markets. SAM provides advisory services related to market timing. SAM bases the largest proportion of its market timing decisions upon proprietary timing models and strategies that have been created by SAM’s research team, which are applied to SAM’s assessment of general market conditions and to the timing of individual transactions in mutual funds, ETFs, stocks and options. Certain mathematical valuation models are employed in regard to options transactions. Although SAM’s strategies are designed to reduce market risk, Clients bear the potential risk of all the markets in which they are invested. The process of adjusting the holdings in Clients’ accounts does involve relatively frequent (and usually small) transactions. Most transactions generate a fee (paid to the broker, not to SAM), the cumulative burden of which could potentially weigh on performance. In order to mitigate the burden of transaction costs on Clients, SAM makes every effort to negotiate favorable commissions with the brokers where SAM’s Clients are housed and to minimize the number of transactions consistent with SAM’s philosophy of active investment management. The holding period for securities in Clients’ accounts is usually under one year. This has potential tax implications for non-retirement accounts. SAM offers strategies to Clients who want to address the tax burden of shorter holding periods. There can be no assurances that a Client will achieve its investment objective or that the strategies pursued and methods utilized by SAM will be successful under all or any market conditions.
Certain Risk Factors
Investing in securities involves risk of loss that Clients should be prepared to bear. A brief explanation of the material risks associated with SAM’s principal investment strategies and methods of analysis follows. Additional risk factors are set forth in a Client’s investment management agreement and the Memorandum of each Fund. Open-End Mutual Funds. All mutual funds bear the full risk of the markets in which they invest. In addition, many funds’ prospectuses allow for the imposition of trading restrictions during market conditions when the fund finds it difficult to meet shareholder redemptions by selling the underlying securities. Such restrictions include redeeming shares in-kind rather than for cash or imposing early redemption fees, either of which could impose significant unexpected costs to the Client. Foreign Equity and Bond Mutual Funds. Compared to funds that invest exclusively in the U.S., foreign funds face additional risks, including currency fluctuations, foreign withholding taxes, and greater difficulty and expense in buying or selling the underlying securities. High Yield Corporate Bond Fund Trading. SAM invests in high yield corporate bond mutual funds for appropriate Clients. High yield bond mutual funds invest in companies whose credit ratings place them below investment-grade. Any single high yield bond issuer has a significant risk of default, especially during difficult economic climates. Mutual funds diversify among many different issuers to reduce the single-company risk. Nonetheless, even well diversified high yield bond portfolios have been subject to major market declines. In order to manage this risk, SAM has developed timing models to indicate when market conditions are favorable for high yield corporate bond funds (approximately 75% of the time, historically) and when conditions are unfavorable. When the timing models indicate that conditions are favorable, SAM’s Clients hold their allocation of high yield bond funds, but when SAM’s models indicate that conditions have turned unfavorable, SAM will move its Clients’ assets from high yield bond funds to Cash Equivalents or safer, investment-grade bond funds. SAM has more than 25 years’ experience trading corporate high yield bond funds with its timing models. High Yield Municipal Bond Mutual Funds. SAM invests in high yield municipal bond mutual funds for appropriate Clients. The underlying bonds in these funds face the following risks. Municipal bonds in the lower rating categories are subject to greater risk of loss of principal and interest than higher-rated municipal bonds and are generally considered to be predominately speculative with respect to the issuer’s capacity to pay interest and repay principal. They also are generally considered to be subject to greater risk than municipal bonds with higher ratings in the case of deterioration of general economic conditions. In addition, adverse publicity and investor perceptions about lower-rated municipal bonds, whether or not based on fundamental analysis, may be a contributing factor in a decrease in the value and liquidity of such lower-rated municipal bonds. In the case of general obligations, there is the risk that an issuer of such obligations could become insolvent and default on the obligations. In such case, the Client would be a creditor of the issuer and would likely not receive full payment of principal and interest on the obligations. In the case of revenue or essential purpose obligation bonds are not direct obligations of any government, and the payment of such obligations is generally dependent on the collection of anticipated revenues from a particular facility or special excise tax. In the event that special revenues backing such obligations are not received, the Client will have no recourse against the issuer or any other party for repayment of such obligations.

The municipal securities markets are fragmented to a significantly greater degree than comparable taxable markets. This fragmentation can lead to aberrational pricing which could have a material adverse effect on the Client. Various factors may adversely affect the value and yield of municipal securities which do not apply to taxable instruments. These factors include imbalances in demand, potential legislative changes as well as uncertainties related to the tax status of municipal securities or the rights of investors holding these securities. Any of these factors could cause losses for the Client. In addition, high yield municipal bonds are subject to increased liquidity and valuation risk as compared to other municipal bonds and to high yield debt securities generally. There may be no active market for a high yield municipal bond, or it may trade in secondary markets on an infrequent basis. It may be difficult for the Client to obtain an accurate or recent market quotation for a high yield municipal bond.

A substantial decline in value is typically experienced by municipal securities trading at or near the original yield to maturity following a significant increase in interest rates. The disproportionate decline in the value of the municipal securities is caused by the de minimis tax rule, which treats as ordinary income any market discount in the price of the bonds (caused by an interest rate increase) above a certain de minimis level. Because potential purchasers of municipal securities find ordinary income treatment highly undesirable, the price of the municipal securities is discounted even below a level sufficient to adjust for this tax treatment. Municipal bonds are also subject to call risk. Call risk is the chance that during periods of falling interest rates, a bond issuer will call—or repay—a higher-yielding bond before its maturity date. Forced to reinvest the unanticipated proceeds at lower interest rates, the Client would experience a decline in income and lose the opportunity for additional price appreciation associated with falling rates. Call risk is generally high for long-term bonds. Municipal bonds may be deemed to be illiquid as determined by or in accordance with methods adopted by SAM. The trading models SAM utilizes are designed to mitigate these risks but cannot be guaranteed to do so. Individual Stocks. Although SAM endeavors to select stocks that its research suggests have favorable characteristics (such as growing dividend payout and solid financial condition), any individual stock is subject to large price swings in response to unpredictable events. Individual Bonds and Preferred Stocks. Any bond or preferred stock not guaranteed by the U.S. Treasury has a risk of borrower default (which could result in a loss of much or all of a Client’s investment in that bond). In addition, the value of any bond, bond mutual fund or preferred stock is affected by changes in interest rates. A general rise in interest rates could depress the value of existing bond or preferred stock holdings in Clients’ accounts. In the case of long-term bonds (maturing in more than ten years) or preferred stocks, the amount of decline in the face of rising interest rates could be severe. In addition, issuers of most preferred stocks are permitted to suspend their dividends (as occurred during the 2007-2009 financial crisis in some cases). Some preferred stocks are “cumulative”, which means that before the issuer can pay any dividend to its common shareholders, it must pay the skipped payments back to its preferred shareholders. Most preferred stocks, however, are not cumulative, which means that the preferred shareholders can never recover a missed payment. Also, preferred stocks are ranked behind the issuer's bonds, so in the event of a bond default the preferred shareholders generally can expect no recovery. Lastly, individual bonds and preferred stocks are frequently illiquid, making it potentially expensive to liquidate Clients’ investments in these vehicles. For this reason, SAM selects only individual bonds or preferred stocks for Clients that SAM judges to be suitable to hold until maturity (or at least for several years).

Dependence on Technical Trading Systems. In its trading, SAM relies in large measure on its technical trading systems. Technical systems are based on mathematical analysis of certain technical and fundamental data regarding past market performance. Such systems take into account fundamental external factors (e.g., weather, interest rates, political climate) only to a limited extent. Thus, even though SAM, on occasion, uses its discretion in trading mutual fund shares, ETFs, and individual equity or debt securities on behalf of Clients notwithstanding the absence of technical signals, SAM’s reliance on such signals may result in an inability to respond to fundamental events in the market place until after their impact has ceased to influence the market. Moreover, there is no assurance that such signals, when generated, will prove correct because no technical trading model or hedge model is totally efficient.

Short-Term Trading. Short-term mutual fund trading is subject to the risks normally associated with the short-term trading of any stock market vehicle. The number of open-end mutual funds that allow for very rapid and unrestricted trading is limited, and the selection of mutual funds into which a Client can invest in accordance with its trading strategies is therefore limited to that extent. Funds with which a Client may trade may underperform other open-end mutual funds that will not permit short-term trading. Mutual Fund Trading. It is possible for the value of a mutual fund to fall more quickly or to rise more slowly than the stock market as a whole. This risk is exacerbated in investments which are concentrated in particular types of securities (e.g., small-cap funds) or particular market sectors (e.g., technology, healthcare, or finance sector funds). Risk is involved in fund selection as well as in market timing. Most mutual fund shares can only be traded at the end of each day, potentially increasing losses on days of steep overall market declines. In addition, some funds only permit trading well before the market closes. Missed trading opportunities may impair performance. There also may be occasions when limited liquidity in the markets may prevent the timely purchase or sale of a Client’s mutual fund holdings. This could impact a Client’s ability to implement its trading strategies. In general, U.S. open-end mutual funds must offer their shareholders the right to redeem shares daily at the close of business and at closing net asset value. However, in certain circumstances, such as a disruption of the orderly markets for the securities in which the mutual funds invest, or the inability of a fund to receive or process all redemption requests, SAM might not be able to dispose of certain holdings, or may do so only at prices that do not represent true market value in the judgment of SAM. This may prevent SAM from limiting losses or realizing gains. The redemption price, consisting of net asset value, is determined unilaterally by the fund manager or custodian.

Exchange Traded Funds (ETFs). ETFs represent shares of ownership in either funds or unit investment trusts that hold portfolios of common stocks or bonds, which are designed generally to correspond to the price and yield performance of their underlying indices, either broad stock market, stock industry sector, international stock, or U.S. bonds. ETF shareholders are subject to risks similar to those of holders of other diversified portfolios. A primary consideration is that the general level of stock or bond prices may decline, thus affecting the value of an equity or fixed income ETF, respectively. This is because an equity (or bond) ETF represents an interest in a portfolio of stocks (or bonds). When interest rates rise, bond prices will generally decline, adversely affecting the value of fixed income ETFs. Moreover, the overall depth and liquidity of the secondary market may also fluctuate. A sector ETF may also be adversely affected by the performance of that specific sector or group of industries on which it is based. International investments may involve risk of capital loss from unfavorable fluctuations in currency values, differences in generally accepted accounting principles, or economic, and political instability in other nations. Although ETFs are designed to provide investment results that generally correspond to the price and yield performance of their respective underlying indices, ETFs are generally not able to replicate exactly the performance of the indices because of their expenses and other factors.

ETFs - Liquidity and Pricing Risks. ETFs, as with individual stocks, can at any time be bought at an asked price or sold at a bid price in a limited quantity. Attempts to transact in larger quantities can move the market against a Client’s position. Although current liquidity is sufficient to accommodate the anticipated volume of transactions in ETFs, this may not always be the case in the future. Closed-End Mutual Funds - Liquidity and Pricing Risks. Closed-end mutual funds incur the same market risks as open-end mutual funds, as well as significant liquidity and pricing risks. The share price of a closed-end mutual fund may differ significantly (either higher or lower) than the market value of the underlying securities in the fund's portfolio because, unlike the situation with ETFs, there is no mechanism by which certain market participants can create or redeem closed- end mutual fund shares in exchange for the underlying basket of securities. As with ETFs, attempts to transact in large quantities of closed-end fund shares can move the market against a Client's position.

Mutual Fund Leverage Risks. The open-end mutual funds, ETFs or closed-end mutual funds invested in by SAM may employ leveraged investment techniques. Leverage is the ability to obtain a return on a capital base to be utilized by SAM that is larger than the equity invested and may involve the use of borrowed funds, options, or other instruments. Use of leverage can magnify the effects of changes in the value of the invested funds and make them more volatile. The leveraged investment techniques that the underlying mutual funds employ could cause SAM to lose more money in adverse environments. Options Trading. Options trading involves certain risks aside from the normal risks associated with trading in common stocks. Options trading may be restricted in the event trading in the underlying instrument becomes restricted. Options trading may itself be illiquid at times, irrespective of the condition of the market of the underlying instrument. Such restriction would make it difficult to offset option positions in order either to realize gain thereon, limit losses or change positions in the market. Options trading also may be subject to the additional risks of potential erratic price movement and short squeezes. In addition, to the extent that SAM engages in naked options strategies involving the purchase or writing of calls or puts, SAM risks losing either the entire premium investment, or a significant amount, in a relatively short period.

International Investments. Mutual funds that invest in foreign securities historically have been highly volatile in nature. To the extent that SAM invests in such instruments, it will be subject to greater risks than are present in comparable U.S. investments. In general, foreign markets are not as liquid and do not have pertinent information disseminated as efficiently as U.S. markets. In addition, with respect to some countries, there is the possibility of expropriation, confiscatory taxation, and/or political, social and financial instability. In addition, if SAM invests in foreign securities denominated in foreign currencies, the value of those securities will be affected by changes in exchange rates.

Use of Margin. SAM has established margin accounts at certain brokerage firms to purchase mutual funds. The use of margin increases the risk potential as well as the profit potential. Margin interest charges also reduce profit potential without mitigating the risk.

Dividend Stock Strategies. SAM invests in individual stocks based on sustainable high current yields and/or dividend growth anticipated by SAM. The population of high yielding, dividend- growing stocks is not a broad representation of the stock market but rather, tends to overemphasize certain sectors at different times. To the extent that SAM allocates capital to this strategy, it will be less diversified and therefore more exposed to single-sector risk than would a broad-market index fund. While this strategy historically has had successful past performance, there have been periods when it has lagged the broader market. For example, in 1998-1999, high-dividend stocks returned significantly less than the overall market. Conversely, however, in 2011, high-dividend stocks generally outperformed the market. Assembling a portfolio of individual stocks entails greater trading costs (from bid-ask spreads), even under a no commission brokerage fee arrangement, than does creating a portfolio comprised of ETFs. SAM believes that there are circumstances in which the potential returns from this strategy outweigh the added trading costs. While generally less volatile than the S&P 500 Index, these stocks nonetheless would have lost over 35% by the low point of the 2007-2009 bear market if held continuously (versus a maximum loss of over 50% for the S&P 500 Index). Mortgage Real Estate Investment Trusts (Mortgage REITs). Mortgage REITs are real estate investment trusts that invest shareholders' equity plus borrowed funds into mortgage-backed securities. The source of profit is the spread between the cost of borrowing, generally at short term rates, and yields received from the REIT's portfolio of mortgage-backed securities. In general, mortgage REITs are highly leveraged, employing as much as $7 in borrowed funds for every $1 of shareholder equity. Being REITs, they can avoid paying corporate income tax by paying out at least 90% of all profits as dividends. Because of the high degree of leverage, dividends can be very high--in many cases 10%/year or more.

The risks of mortgage REITs arise from their dependence on interest rate sensitive holdings and from the high degree of leverage. In general, when interest rates fall, many mortgage borrowers refinance. As a result, mortgage-backed securities do not benefit from falling interest rates to the same extent as conventional, option-free bonds. However, when interest rates rise, mortgage- backed securities are subject to similar interest rate risks as option-free bonds of similar credit risk and maturity. Since mortgage REITs hold mortgage-backed securities, their share prices are at risk of falling when mortgage rates rise. For example, in mid-2013 many mortgage REITs suffered losses exceeding 30% from April-December as long-term interest rates rose by more than a full percent as the leverage magnified losses in the actual securities.

A second risk is a compression of the spread between the borrowing costs and the yields available from mortgage-backed securities. Since the profit of a mortgage REIT depends both on maintaining the value of existing holdings and on the spread between borrowing costs and yields, any change in the interest rate climate that compresses the spread can cut profits, resulting in a possible dividend cut and drop in share price. The managers of mortgage-REITs attempt to mitigate interest rate risk and spread risk through their internal hedging strategies.

A third risk is that sometimes, mortgage REIT shares trade higher than the actual value of the REITs underlying holdings. This premium to book value can shrink or evaporate, creating losses for shareholders even if the REIT's underlying portfolio performs as desired. Conversely, when mortgage REITs are trading at a discount to the value of the underlying portfolio, there may be added opportunities for profit if the discount narrows.

SAM will attempt to mitigate these risks by investing only in mortgage REITs where the yield appears attractive relative to the risks, and where the share price bears an attractive or neutral relationship to book value. SAM also will utilize its own interest rate timing models in an attempt to avoid unfavorable market conditions. Epidemics and Pandemics. Many countries have been susceptible to epidemics, such as severe acute respiratory syndrome, avian flu, H1N1/09 flu and, currently, COVID-19 (commonly known as the “CORONAVIRUS”). The epidemic or pandemic outbreak of an infectious disease in a country or region of the world or globally, together with any resulting restrictions on travel, transportation or production of goods or quarantines imposed, could have a negative impact on the national, regional or global economy and business activity in any of the countries in which a Client may invest (some economists have warned that global economic growth could be cut by more than half and that countries and the global economy could be plunged into recession) and thereby adversely affect the performance of a Client’s investments. While the economic impact of the ongoing global outbreak of the CORONAVIRUS is presently uncertain, such outbreak and any future outbreak of an infectious disease or any other serious public health concern in a country, region or globally could materially harm a Client’s investments. In addition, the CORONAVIRUS has led to significant volatility in the securities markets and the CORONAVIRUS and any future outbreak of an infectious disease or any other serious public health concern may lead to additional volatility and illiquidity of a Client’s investments. Furthermore, the CORONAVIRUS and any future outbreak of an infectious disease or any other serious public health concern may lead to significant interruption in normal business activity of SAM and/or other service providers that service the Client’s investment account (e.g., brokers and custodians) which could negatively affect the performance of the Client’s account.

The foregoing does not purport to be a complete explanation of the risks involved in trading mutual funds or with respect to any investment strategy. please register to get more info

SAM does not have any disciplinary or legal events to report. please register to get more info

SAM serves as the managing member to the SRM Fund, which invests as described under Items 4 and 8. In accordance with their investment objectives and tolerance for risk, SAM may recommend that particular Clients who have separately managed accounts invest in the Funds. As described in Item 5 above, the Funds pay management fees to SAM. Clients that invest a portion of their assets in the Funds do not pay management fees to SAM on such assets other than the management fees paid to SAM by the Funds on account of such assets. Nonetheless, SAM has a conflict of interest in recommending that Clients invest in the Funds because the Funds generally pay higher management fees than separately managed accounts. SAM’s policy is only to recommend Fund investments to Clients if it believes the Fund investment is in the best interest of such Clients. please register to get more info

PERSONAL TRADING
Code of Ethics
SAM has adopted a Code of Ethics (the “Code”) which sets forth the ethical and fiduciary principles and related compliance requirements under which SAM operates and the procedures for implementing those principles. The Code includes provisions that govern fiduciary duty, Client opportunities, insider trading, personal trading, gifts and entertainment, political contributions, outside business activities and confidentiality. The Code contains policies and procedures that, among other things:
• prohibit Employees from taking personal advantage of opportunities belonging to Clients;
• prohibit trading on the basis of material nonpublic information;
• place limitations on personal trading by Employees and impose preclearance (in certain cases) and reporting obligations with respect to trading; and
• require initial and annual reports of securities holdings and quarterly transaction reports by Employees. SAM’s Code is available to any Client or prospective Client upon request by contacting Tracey Landry at (516) 829-6444.
Conflicts Between Client Accounts and Systems and Forecasts Subscribers
Client accounts generally will receive SAM’s investment recommendations before Systems and Forecasts subscribers receive such recommendations. Therefore, Systems and Forecasts subscribers may not able to buy securities recommended by SAM at prices as favorable as the prices SAM obtained for its Clients. Similarly, sell recommendations made by SAM to Systems and Forecasts subscribers may not be made at prices that are as favorable as the prices SAM obtained for Client accounts. Recommendations of Funds In accordance with their investment objectives and tolerance for risk, SAM may recommend that particular Clients invest in the Funds. See Item 10 above for the conflict of interest inherent in this practice and manner in which SAM addresses this conflict of interest.
Trading Conflicts Between Client Accounts and SAM-Related Accounts
SAM, consistent with Clients’ investment objectives and in accordance with applicable law, from time to time will cause accounts it manages to effect, and will recommend to Clients or prospective Clients and to Systems and Forecasts subscribers the purchase or sale of securities in which SAM, its employees, officers and/or owners (collectively, “Related Persons”) directly or indirectly, have a position or interest. Related Persons have two different types of accounts. Certain Related Persons’ accounts are managed by SAM according to the same strategy as Client accounts (“Managed Related Accounts”) and other Related Accounts are managed by the Related Persons themselves according to a strategy that differs from SAM Client account strategies (“Personal Accounts”). Both Personal Accounts and Managed Related Accounts (collectively “Related Accounts”) often invest in the same securities as Client accounts at or about the same time as Client accounts. This creates various conflicts of interest because Related Persons have an incentive to achieve better performance for Related Accounts than Client accounts. Nonetheless, SAM believes this conflict of interest is greatly mitigated by the fact that generally the securities SAM invests in for Client accounts are liquid and readily available investments. Furthermore, with respect to Personal Account trading, SAM requires preclearance of any Personal Account trade that will be greater than 0.1% of the average daily trading volume for such security during the three-month period immediately preceding the date of such trade. In addition, SAM monitors Personal Account trades by reviewing transaction reports and holding reports required to be submitted under the Code. With respect to Managed Related Account trading, SAM mitigates this conflict of interest by trading Managed Related Accounts according to its allocation policies described below.
Allocation Policies
From time to time, it is appropriate for more than one of the accounts managed by SAM to trade in the same securities at the same time. Generally, SAM determines prior to a trade the amount of securities it wishes to sell or purchase for Client accounts. For all accounts managed according to the same investment strategy SAM will generally (subject to the exceptions described below) invest or divest uniform percentages of each account’s total assets in or from identical securities (“target percentages”). Target percentages are generally decided prior to placing an order. Portfolio Managers may consider some or all of the following factors in making decisions as to the amount of a security to purchase or sell for accounts held in a particular investment strategy: the strategy’s investment objective, policies, restrictions, risk tolerance, time horizon, portfolio construction, tax sensitivity, desired market capitalization range, nature and size of accounts held in the strategy, suitability, tolerance for portfolio turnover, availability of cash or buying power, and whether the strategy’s accounts are eligible to participate in a trade pursuant to compliance regulations. Sometimes specific accounts in the strategy will not be allocated the security or a lower amount of the security than the target percentage for the strategy because of the accounts’ particular investment restrictions, risk tolerance, time horizon, tax sensitivity, nature and size, tolerance for portfolio turnover, liquidity and size limitations, availability of cash or buying power, and whether they are eligible to participate in a trade pursuant to compliance regulations.

When SAM seeks to buy or sell a particular security for more than one Client SAM, generally, aggregates the purchase or sale of such security for all participating Clients at the same time (“block trading”). In addition, SAM generally aggregates Client trades with Managed Related Account trades. All eligible accounts generally participate pro rata in the block purchases or sales according to the target percentage established for each participating account and bear pro rata the commission cost. All portions of a block trade executed through the same broker-dealer will be allocated at the average price obtained by the broker- dealer on that day. If partial sales or purchases are made of equity securities, the allocation of the equity securities to the accounts shall be in the same ratio as the amounts intended to be bought or sold based on the target percentages. Exceptions to this policy may occur. For example, if one or more accounts would be unable to meet an investment objective, of if a pro rata allocation results in a de minimis allocation to certain accounts, SAM may deviate from the preallocation formula. When equity securities transactions are only partially filled, a conflict of interest arises to the extent SAM aggregates Managed Related Accounts orders together with Client orders. Under such circumstances, if the Manager Related Accounts were not to participate in such limited opportunities, the Client accounts would be able to receive or sell a greater percentage of the security. Consequently, when Manager Related Accounts participate in limited equity securities opportunities, they reduce the opportunity available to Client accounts. Furthermore, if SAM did not manage multiple Client accounts, each Client individually would be able to receive or sell a greater percentage of limited opportunity securities. Consequently, when multiple Clients participate in limited opportunity trades, each participating account reduces the opportunity available to other participating accounts. As noted above, SAM expects these conflicts of interest to arise infrequently because generally the securities SAM invests in for Client accounts are liquid and readily available investments. In the case of partially filled orders in debt securities, because generally it is not practical to allocate pro rata and might in fact result in higher transaction costs to all participating accounts, the portfolio manager generally allocates such orders on a rotational basis, with the goal of achieving equitable treatment of all accounts over the long term. In such situations, Managed Related Accounts do not participate in such orders unless and until all Client needs are satisfied.

While SAM’s goal is to be fundamentally fair to all Clients on an overall basis with respect to the allocation of investment opportunities, on a trade-by-trade basis some Clients may be treated more favorably than other Clients.

Principal Trades
SAM does not engage in principal transactions with Client accounts, and, before it could do so, it would have to secure applicable Client consent. Principal transactions are generally defined as transactions where an adviser, acting as principal for its own account, buys from or sells any security to any advisory client. A principal transaction may also be deemed to have occurred if a security is crossed between an affiliated private investment fund and another client account.
Cross Trades
From time to time, SAM may determine that it is in the best interest of its Clients to cross trade securities between Client accounts. SAM executes cross transactions by asking custodians that custody SAM’s Clients’ assets to transfer on their internal ledgers securities from one managed account to another for no transaction fee or a reasonable transaction fee relative to the size of the transaction. SAM will not engage in a cross transaction until it determines that the particular trade is in the best interests of the Client accounts involved in the trade. As a general matter, when SAM executes cross transactions between Client accounts, it will price the securities involved in the transactions at the last sale price of the security or the average of the current highest independent bid and the current lowest independent ask price for the security. In the unlikely event that a cross trade occurs for a security that cannot be fairly priced based upon the above criteria, SAM will price the securities based upon their fair value as determined by SAM. please register to get more info

In connection with the execution of its securities transactions, SAM generally will have the authority to determine, without obtaining specific Client consent, the broker to be used and the commission rate paid. SAM’s selection of brokers is guided and/or limited by (i) its responsibility to act as a fiduciary when handling Clients’ accounts; (ii) its obligation, to the extent applicable and subject to the conditions hereinabove specified, to select brokers who offer overall best execution on Clients’ trades; (iii) any directed brokerage arrangements as described below; and (iv) with respect to the Funds, any limitations described in the Memorandum. SAM does not adhere to any rigid formulas in making its selection of brokers, but will weigh a combination of the criteria described below. Generally, SAM will recommend and use those brokers or dealers that it determines in good faith offer the best prices given the quality of the brokerage (e.g., execution, stability of capital base, competitive fee arrangements) such brokers or dealers provide and that SAM believes are reputable, reliable, financially responsible, and well established (“Best Execution Factors”). While SAM generally seeks reasonably competitive commission rates, it does not necessarily pay the lowest spread or commission available. SAM participates in the institutional adviser programs (the "Adviser Programs”) including those offered by TD Ameritrade Institutional (TD Ameritrade Institutional is a division of TD Ameritrade Inc., member FINRA/SIPC/NFA ("TD Ameritrade")); Charles Schwab and Co., Inc.; and Fidelity Investments. These brokers are unaffiliated SEC-registered broker-dealers and FINRA members. The Adviser Programs offered by these brokers offer independent investment advisers and their clients services that include custody of securities, trade execution, order routing, clearance and settlement of transactions. SAM’s Clients usually custody their assets at one of these broker-dealers, and SAM will usually execute trades for its Clients at the broker-dealer where the Client custodies its assets. SAM, at times, also recommends a particular one of these brokers to a Client for custody and execution. There is no direct link between SAM's participation in an Adviser Program and the investment advice it gives to its Clients, although SAM receives economic benefits through its participation in the Adviser Programs that are typically not available to retail customers of these brokers. These benefits include the following products and services (provided without cost or at a discount): receipt of duplicate Client statements and confirmations; research related products and tools including unsolicited third-party research (for example, from Standard & Poors or Moody’s); consulting services; access to a trading desk serving SAM participants; access to block trading (which provides the ability to aggregate securities transactions for execution and then allocate the appropriate shares to Client accounts); the ability to have advisory fees deducted directly from Client accounts; access to an electronic communications network for Client order entry and account information; access to mutual funds with no transaction fees and to certain institutional money managers; and discounts on compliance, marketing, research, technology, and practice management products or services provided to SAM by third party vendors. The brokers sometimes also provide free attendance at conferences or seminars that they sponsor. The brokers may also pay for business consulting and professional services received by SAM’s Related Persons. SAM does not necessarily utilize every one of these benefits. Some of the products and services made available by a particular Adviser Program benefit SAM but do not benefit its Client accounts or will benefit Client accounts that did not generate commissions for which the benefits were received including Client accounts custodied at other brokers. Some of the services made available by the Adviser Programs are intended to help SAM manage and further develop its business enterprise. The benefits received by SAM or its personnel through participation in the Adviser Programs do not depend on the amount of brokerage transactions directed to the broker-dealer. However, the commission rates charged by such brokers may be higher or lower than other brokers. As part of its fiduciary duties to Clients, SAM endeavors at all times to put the interests of its Clients first. Clients should be aware, however, that the receipt of economic benefits by SAM or its related persons in and of itself creates a conflict of interest and may influence SAM’s choice of broker for custody and brokerage services. In certain cases, Clients may direct that their own brokers be used. Individual Clients must approve and themselves make the deposits into brokerage houses and/or mutual fund accounts, and only they can request withdrawals of capital other than authorized trading by SAM. Clients who direct the selection of brokerage in this way understand that in doing so:
• they may be restricting SAM’s ability to obtain as favorable a transaction price or commission rate or overall best execution as might otherwise be obtainable;
• May lose investment opportunities because SAM will generally invest their assets only after Clients that do not direct brokerage;
• that the Clients’ accounts may forego benefits from savings on execution costs that may otherwise be obtained, most notably by aggregating brokerage orders for various accounts; and
• that there may be additional credit and/or settlement risk in using the brokers they selected. As part of its brokerage placement practices, some of the brokers that SAM uses have referred or may refer Clients to it, which may include brokers that Clients direct SAM to use. See Item 14. If the broker to be used by SAM has referred Clients, or may refer Clients to SAM, SAM has a conflict of interest between its duty to obtain best execution for a Client and its interest in receiving future referrals. In addition, commission rates charged by certain brokers that refer clients to SAM are sometimes higher than the commission rates charged by other brokers that SAM uses. Nonetheless, SAM believes the investment performance of Clients that trade through such brokers is comparable to the investment performance of Client accounts that trade through brokers that do not make referrals to SAM and that referring brokers provide execution that is comparable to non- referring brokers. A Client who is referred to SAM by a particular broker may instruct SAM to use that broker or a different broker to effect transactions for the Client’s account. For information regarding SAM’s trade aggregation policies see Item 11 above. Trade Errors It is the policy of SAM to reimburse Client accounts for any losses suffered by the Client because of a trade error caused by SAM or one of its employees. Any gains realized by a Client account as a result of a trade error caused by the Firm or one of its employees are to remain in the Client’s account. SAM will net gains and losses only in the circumstance in which more than one transaction must be effected to correct one or more trade errors made as a result of a single investment decision. SAM also seeks to recover the amount of losses caused to Client accounts by broker errors. However, SAM is not responsible for ensuring that brokers compensate Clients for such broker errors. please register to get more info

SAM’s assessment of market conditions is reviewed at least weekly, and frequently on a daily basis. Client assets under discretionary management are reviewed on a generally daily basis but not less than weekly basis to determine current operating strategy and market position. Client advice furnished through SAM’s newsletter is updated bi-weekly via the newsletter and weekly via a weekly email market update service. Reviews are generally conducted by Marvin Appel (President) and by portfolio managers who may have certain discretionary authority to act within specific guidelines under which SAM operates, including, but not limited to, certain valuation and other models that are employed. Depending on their level of experience, portfolio manager reviewers (other than Marvin Appel) have responsibility for as few as 2 and as many as 220 accounts. Clients receive copies of all transaction confirmations, periodic statements from brokerage houses and mutual funds (usually monthly), and quarterly statements from SAM as to the assets and progress of their accounts. These statements are written and are sent either as hard copies or electronically, according to each Client’s preference. Investors in the Funds receive written monthly statements that show the previous month’s net results, provide a statement of assets, and provide the net value of the investor’s account at month’s end. Such investors are also furnished annual audited financial statements and limited liability company tax returns. please register to get more info

See Item 12 above for items SAM receives from broker-dealers and the related conflicts of interest in receiving such items. SAM has received Client referrals from TD Ameritrade through its past participation in TD Ameritrade AdvisorDirect (“AdvisorDirect”). In addition to meeting the minimum eligibility criteria for participation in AdvisorDirect, SAM may have been selected to participate in AdvisorDirect based on the amount and profitability to TD Ameritrade of the assets in, and trades placed for, Client accounts maintained with TD Ameritrade. TD Ameritrade is a discount broker- dealer independent of and unaffiliated with SAM and there is no employee or agency relationship between them. TD Ameritrade established AdvisorDirect as a means of referring its brokerage customers and other investors seeking fee-based personal investment management services or financial planning services to independent investment advisors. TD Ameritrade does not supervise SAM and has no responsibility for SAM’s management of Client portfolios or SAM’s other advice or services. Although SAM no longer participates in AdvisorDirect and does not receive Client referrals from TD Ameritrade, SAM continues to pay TD Ameritrade an on-going fee for past Client referrals. The fee for past Client referrals is a percentage (up to 25%) of the advisory fee that the referred Client pays to SAM (“Solicitation Fee”). SAM will also pay TD Ameritrade the Solicitation Fee on any advisory fees received by SAM from any of an existing referred Client’s family members, including a spouse, child or any other immediate family member who resides with the referred Client and hired SAM on the recommendation of such referred Client. SAM does not charge Clients referred through AdvisorDirect any fees or costs higher than its standard fee schedule offered to its Clients or otherwise pass Solicitation Fees paid to TD Ameritrade to its Clients. For information regarding additional or other fees paid directly or indirectly to TD Ameritrade for referred Clients, please refer to the TD Ameritrade AdvisorDirect Disclosure and Acknowledgement Form which you may obtain by contacting SAM or TD Ameritrade. SAM has agreed not to solicit Clients referred to it through AdvisorDirect to transfer their accounts from TD Ameritrade or to establish brokerage or custody accounts at other custodians, except when its fiduciary duties require doing so. SAM’s past participation in AdvisorDirect does not diminish its duty to seek best execution of trades for Client accounts as described in item 12 above. SAM may pay referral fees to third parties, which may include broker-dealers or other investment advisers, who refer Clients to it for advisory services. As applicable, such arrangements will comply with Rule 206(4)-3 under the Investment Advisers Act of 1940, as amended (“Advisers Act”). Other than the benefits described in Item 12 and in this Item 14, SAM does not receive any economic benefits for providing advice to its Clients from anyone other than its Clients. please register to get more info

SAM does not have actual custody of any Client assets, but is deemed to have custody over certain Client accounts for the reasons described hereafter. SAM, as managing member to the SRM Fund, is deemed to have custody of the SRM Fund’s assets (i.e., the assets of each Fund comprising a separate segregated portfolio) under Rule 206(4)-2 under the Advisers Act (the “Custody Rule”). See also Items 4 and 10 above. In accordance with the Custody Rule, audited financial statements are furnished annually to all investors in the Funds. As applicable to each Fund, investors also receive periodic unaudited reports, account balances, commentary and/or other information regarding such Fund or their investment in such Fund. SAM is also deemed to have custody under the Custody Rule over those Client accounts for which it deducts its advisory fees from the Clients custodian without the preapproval of the Client. Generally, Clients will receive quarterly account statements from their custodians for their separately managed accounts including all Clients over which SAM is deemed to have custody of their assets. SAM also sends quarterly statements for separately managed accounts to the holders of such accounts. Clients (and investors) are urged to carefully review all accounts statements and contact SAM if they have any questions. Separately managed account Clients are also urged to compare the quarterly account statements they receive from SAM to the quarterly statements they receive from their custodians and to contact SAM if they have any questions upon conducting such a review. please register to get more info

SAM provides investment advisory services to its Clients on a discretionary basis relating primarily to the investment of Clients’ assets in mutual fund shares, as well as ETFs, individual stocks and bonds, and options. SAM has the authority to determine, without obtaining specific Client consent, the securities to be bought and sold and the amount of securities to be bought and sold. The particular selection of holdings in each Client’s account depends on the Client’s financial situation, investment objectives, tolerance for risk, and the prevailing market climate. Limitations on SAM’s authority are guided by, among other things, (i) its responsibility to act as a fiduciary when handling Clients’ accounts, (ii) the investment strategies and objectives of its Clients, and (iii) with respect to the Funds, any restrictions described in the Memorandum. On occasion, Clients may direct SAM to hold particular securities in their accounts on a long-term basis, notwithstanding any change in SAM’s assessment of market conditions. Clients may also place reasonable restrictions on the type of securities SAM may purchase for their accounts (for example, due to tax considerations). Prior to SAM assuming the discretionary management of any account, each Client must complete the paperwork necessary to grant SAM the authority to manage the Client’s account(s). For individual Client accounts housed at a brokerage firm, the brokerage firm will also require separate written authorization from the Client granting SAM a limited power of attorney to manage the account but not to deposit or withdraw assets from it (except possibly to pay management fees). please register to get more info

Proxy Voting
When granted the discretion to vote Client securities (which is generally the case), SAM’s proxy voting policy is to consider proxy voting proposals on a case-by-case basis to determine if the benefits of voting such proxies exceed the expected costs. SAM generally does not vote routine proxy proposals as SAM has found that the costs of voting routine proxy proposals generally outweigh the benefits of voting such proxies. Each proxy proposal that SAM determines should be voted because the expected benefits of voting such proxies exceed the expected costs will be reviewed by a member of SAM’s portfolio management team to determine the manner in which such proxy should be voted. The member of the portfolio management team will determine how to vote such proxies based on what he or she believes to be in the best interests of Clients. SAM must act as a fiduciary when voting proxies on behalf of its Clients. In that regard, SAM will seek to avoid possible conflicts of interest in connection with proxy voting as follows: Where SAM identifies a potential conflict of interest (such as if SAM or an Employee is affiliated or associated with an issuer or SAM holds the issuer’s securities on a proprietary basis), SAM will initially determine whether such potential conflict is material. Where SAM determines there is a potential for a material conflict of interest regarding a proxy, SAM will: (i) fully disclose the material facts regarding the conflict and seek the Client’s consent to vote the proxy as intended; and/or (ii) seek the recommendations of an independent third party. Any Employee who has a direct or indirect pecuniary interest in any issue presented for voting, or any relationship with the issuer, must so inform SAM’s Chief Compliance Officer and recuse himself or herself from decisions on how proxies with respect to that issuer are voted. SAM’s President, Marvin Appel, oversees and manages the process by which it votes proxies. Each advisory Client may obtain SAM’s proxy voting policy and procedures or a record of SAM’s proxy voting for such Client by contacting Marvin Appel at (516) 829-6444. Notwithstanding the foregoing, Clients may direct a vote with respect to any of the securities in their individual brokerage account by contacting Marvin Appel at the number above.
Class Actions
SAM will not be the lead plaintiff in class action lawsuits or actively participate in the litigation of any such lawsuit. If SAM receives class action proof of claim forms on behalf of Clients to participate in class action settlements, it will generally file such proof of claim forms on behalf of its Clients. If Clients receives class action proof of claim forms, it is the Clients’ responsibility to file such proof of claim forms. However, at the request of Clients SAM will assist them complete the proof of claim forms. please register to get more info

SAM has no financial condition that impairs its ability to meet contractual commitments to Clients, and has not been the subject of a bankruptcy proceeding. please register to get more info