Vol III, No. 7

August 2015

A monthly commentary about the role of behavior (and misbehavior) in investing

The Misbehaving Investor

As the summer winds down, the markets recently have been far from tranquil. In our view, as it has done in the past, today's market volatility could lead to opportunity for the thoughtful investor.

Also, we welcome new investors in the Triad Small Cap Value mutual fund (TSCVX). Click here to visit the Fund's website where you can learn more about the Fund and download a copy of the prospectus.

John Feb 5

John Heldman, CFA

Partner | Portfolio Manager

Dave Hutchison, CFA

Partner | Portfolio Manager

About Us

Triad Investment Management manages all-cap, small-cap and balanced portfolios with a focus on Research, Behavior and Ethics. Triad is also the Adviser to the Triad Small Cap Value (TSCVX) mutual fund. Founded in 2008, Triad is a 100% employee-owned SEC registered investment adviser. Learn more at www.triadim.com.

Triad managed $131 million as of June 30, 2015. The Concentrated All-Cap Equity composite return, annualized and net of fees since inception, is 9.1% vs. 8.1% for the S&P 500 Index (April 30, 2008 to June 30, 2015).

Please review our Concentrated All-Cap Equity annual disclosure presentation and the important disclosures at the bottom of this issue. Past performance does not guarantee future results.

Lumpy

"A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines."

-Ralph Waldo Emerson, American author and poet (1803-1872)

Emerson was illustrating the difficulty that people have in changing their minds based upon new information. He was highlighting the downside of consistency, that we must always be aware of our own biases and don't simply accept the status quo.

There's an old adage that says "war is long periods of boredom punctuated by moments of sheer terror." Pilots have expressed similar sentiments about flying. I'd make one more addition to the list: stock market investing. Markets can bob along with not much activity, until something, often recognizable in hindsight, comes out of the blue to upset the scene. Sometimes it's favorable. But just as often it seems, it's not.

The S&P 500 index has averaged 10% per year over the past nine decades. But the yearly returns have varied greatly. Most years the market is either far below or far above that 10% number. It's the nature of markets to exaggerate in the short-term. Things get smoothed out over decades. But we humans aren't always wired to wait decades. In my view, if you want to pursue superior long-term results, you must accept the inevitable lumpy nature of market progress.

These past few days I've been enjoying my own bit of lumpiness. No, it's not my waistline. My wife just celebrated a birthday 2 days ago and joined a new demographic group (no, I can't say what it is). And we marked our 27th wedding anniversary yesterday. Finally, today is my mom's 85th birthday. Happy birthday mom. As in the stock market, so in life we often have a bit of lumpiness.

-John Heldman, CFA

Past performance does not guarantee future results. Results are presented net of fees and include the reinvestment of all income. The opinions expressed herein are those of Triad Investment Management, LLC and are subject to change without notice. Consider the investment objectives, risks and expenses before investing. The information in this presentation should not be considered as a recommendation to buy or sell any particular security and should not be considered as investment advice of any kind. You should not assume that any securities discussed in this report are or will be profitable, or that recommendations we make in the future will be profitable or equal the performance of any securities discussed in this presentation. The report is based on data obtained from sources believed to be reliable but is not guaranteed as being accurate and does not purport to be a complete summary of the available data. Recommendations for the past twelve months are available upon request. In addition to clients, partners and employees or their family members may have a position in any securities mentioned herein. Triad Investment Management, LLC is a registered investment adviser. More information about us is included in our SEC Form ADV Part 2, which is available upon request.

Triad Investment Management, LLC claims compliance with the Global Investment Performance Standards (GIPS�). Triad has been independently verified by Ashland Partners & Company, LLP for the period from the strategy's inception, April 30, 2008, through June 30, 2015. Triad is an SEC-registered investment advisor. The composite includes all fully discretionary separately managed accounts that follow the firm's Concentrated All-Cap Equity investment strategy, including those accounts no longer with the firm. Triad's strategy is to invest in a concentrated portfolio (usually holding between 20 to 30 securities) of common stocks, unrestricted as to market capitalization, of both domestic and international companies. The U.S. Dollar is the currency used to express performance. Past performance is not a guarantee of future results, and there is a risk of loss in investing in equities. Results are presented net of fees and include the reinvestment of all income. Investments made by Triad for its clients differ significantly in comparison to the referenced indexes in terms of security holdings, industry weightings, and asset allocations. Accordingly, investment results and volatility will differ from those of the benchmarks. As of June 30, 2013, the Triad Equity Composite was renamed the Concentrated All-Cap Equity Composite. For more information or for a copy of the firm's fully compliant presentation and the firm's list of composite descriptions, please contact us at (949) 679-3991.

%	2Q 15	YTD	1 Year	3 Year	5 Year	Inception
Triad Concentrated All-Cap Equity	(1.3)	(6.2)	(12.1)	11.9	13.7	9.1
S&P 500 Index	0.3	1.2	7.4	17.3	17.3	8.1

As of June 30, 2015. Results presented net of management fees.

� 2015 Triad Investment Management, LLC