Jon R. Carnes has over 20 years experience investing in a broad range of industries and companies of all sizes. From 1992 to 2000 he built a successful stock trading business, becoming the largest private client at two major electronic brokerage houses. Since 2001 he has focused exclusively on value investing, spending five years in China and blowing the whistle on numerous Chinese investment frauds undercovered during the course of his due diligence. Mr. Carnes is a Phi Beta Kappa graduate of the University of South Carolina with a degree in business economics.

In addition to investing, Mr. Carnes arranged initial financing for the production of a Sundance nominated documentary, I.O.U.S.A., that warned Americans about the looming debt crisis and starred Bill Bixby, Warren Buffett, and David Walker. In the six months following I.O.U.S.A.’s 8/21/2008 premiere, U.S. stocks fell by 40%. You can watch I.O.U.S.A. on Youtube here.



Mr. Carnes (right) discusses I.O.U.S.A with Warren Buffett and David Walker at the film’s premiere in Omaha.

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Case Study

Investment Strategy

Introduction


Introduction & Background


Since 2004, Eos has invested in China, both long and short, participating in the Middle Kingdom’s astonishing growth while hedging against its widespread fraud and corruption.

Eos has achieved tremendous success from following a rigorous approach to due diligence. If a company passes our review and presents a good value, we invest. At the other extreme, when we find a company has defrauded investors, we short the stock. Eos’s fund manager, Jon Carnes, blew the whistle on eight Chinese stock frauds. All eight were subsequently delisted from the U.S. exchanges and the SEC charged three companies with fraud.

Eos’ largest investor is a nonprofit endowment fund that has donated over $3 million to various charitable causes since its establishment. Eos is domiciled in the Commonwealth of Dominica and does not accept or solicit investments from the public.

Investment Strategy


Eos follows a value investing approach focused on buying discounted shares in early stage companies with superior management performance, capable of achieving substantial market share and high return on invested capital. These three elements make up what value investors such as Warren Buffett call a “franchise” or business with “durable” competitive advantages protecting it from competition and erecting barriers to new entrants.

Such “franchises” exhibit at least one of three competitive advantages. First and foremost are “demand” oriented advantages such as customer preference, habit, captivity, switching costs, or lack of substitutes. Second are supply advantages such as cost advantages, geography, technology, patents, or experience. Third are economies of scale whereby the largest company due to high fixed overhead and leading market share enjoys substantially lower per unit production costs than its smaller competitors.

Eos hedges its value investments by shorting: 1) Overvalued companies that have no competitive advantages, and 2) Questionable companies that fail our rigorous due diligence process.


Mr. Carnes' Chinese investment insights can be found on his blog “Alfredlittle.com” where he has exposed numerous Chinese stock frauds, saving investors hundreds of millions of dollars.

You may also follow him on Twitter by clicking below:


  Follow @carnesjon



Contact:

Registered Office:
8 Copthall
Roseau Valley 00152
Commonwealth of Dominica

All inquiries and correspondence:

email: info@eosfunds.com


Jon R. Carnes has over 20 years experience investing in a broad range of industries and companies of all sizes. From 1992 to 2000 he managed his own stock trading business, becoming the largest private client of two of the nation’s largest electronic brokerage houses. In 2001 he transitioned from trading to making long-term value investments. Mr. Carnes is a Phi Beta Kappa graduate of the University of South Carolina with a degree in business economics.

In addition to investing, Mr. Carnes arranged initial financing for the production of a Sundance nominated documentary, I.O.U.S.A., that warned Americans about the looming debt crisis and starred Bill Bixby, Warren Buffett, and David Walker. In the six months following I.O.U.S.A.’s 8/21/2008 premiere, U.S. stocks fell by 40%. You can watch I.O.U.S.A. on Youtube here.

Below is a picture of Mr. Carnes discussing I.O.U.S.A with Warren Buffett and David Walker at the film’s premiere in Omaha.

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