5-year goal in focus!
As we approach our five-year anniversary, we’re pleased to report that our goal of achieving an annualized return of around 15% (net of fees) over this period seems within reach, barring any significant market disruptions in Q4. We’re proud to be on track for these returns, especially given the challenges we’ve faced, including two bear markets and a recession. While our target is ambitious by industry standards, and we may not always hit it, this goal reflects the key objectives we strive for:
1) Generating returns in excess of the index.
2) Providing diversification from the index, which can enhance the risk profile of our clients’ overall portfolios.
3) Holding companies that are resilient enough to endure a recession.
By achieving these objectives, we aim to offer a strategy that complements a diversified portfolio and helps clients weather the inevitable market storms.
We’d like to extend our sincere thanks to our clients for their continued trust. Although our long-term returns have been strong, the path to success has included many bumps and fluctuations. Good returns are rarely achieved in a straight line.
Small Caps Bounce Back in Q3
Small-cap stocks have underperformed compared to large caps this year, but the Russell 2000 Index had a strong Q3, regaining some lost ground. While we remain slightly behind the index year-to-date, our relative performance can vary significantly, sometimes by a few percentage points in a single day. I wouldn’t be surprised if we surpass the index for the fifth consecutive calendar year, as our stocks are beginning to attract more attention. However, this will ultimately be determined in Q4, and short-term movements remain unpredictable.
I have written extensively about our largest holdings (please see the Q2 write-up for details). These companies continue to show strong progress, and we believe the market is significantly undervaluing their assets. Our confidence in these investments has only grown as new evidence supports their success. While no strategy guarantees success in each investment, it’s crucial to exit underperformers early and increase our holdings in companies that execute well. Our largest positions have grown because we’ve added to them as they delivered on their strategies and because, we believe, their stock prices are not yet reflecting their full potential.
Thank you for your continued trust and confidence. We’re always here to answer any questions—please don’t hesitate to call or email.
Zack
Small Cap Q3 2024 Commentary
Zack Perry
5-year goal in focus!
As we approach our five-year anniversary, we’re pleased to report that our goal of achieving an annualized return of around 15% (net of fees) over this period seems within reach, barring any significant market disruptions in Q4. We’re proud to be on track for these returns, especially given the challenges we’ve faced, including two bear markets and a recession. While our target is ambitious by industry standards, and we may not always hit it, this goal reflects the key objectives we strive for:
1) Generating returns in excess of the index.
2) Providing diversification from the index, which can enhance the risk profile of our clients’ overall portfolios.
3) Holding companies that are resilient enough to endure a recession.
By achieving these objectives, we aim to offer a strategy that complements a diversified portfolio and helps clients weather the inevitable market storms.
We’d like to extend our sincere thanks to our clients for their continued trust. Although our long-term returns have been strong, the path to success has included many bumps and fluctuations. Good returns are rarely achieved in a straight line.
Small Caps Bounce Back in Q3
Small-cap stocks have underperformed compared to large caps this year, but the Russell 2000 Index had a strong Q3, regaining some lost ground. While we remain slightly behind the index year-to-date, our relative performance can vary significantly, sometimes by a few percentage points in a single day. I wouldn’t be surprised if we surpass the index for the fifth consecutive calendar year, as our stocks are beginning to attract more attention. However, this will ultimately be determined in Q4, and short-term movements remain unpredictable.
I have written extensively about our largest holdings (please see the Q2 write-up for details). These companies continue to show strong progress, and we believe the market is significantly undervaluing their assets. Our confidence in these investments has only grown as new evidence supports their success. While no strategy guarantees success in each investment, it’s crucial to exit underperformers early and increase our holdings in companies that execute well. Our largest positions have grown because we’ve added to them as they delivered on their strategies and because, we believe, their stock prices are not yet reflecting their full potential.
Thank you for your continued trust and confidence. We’re always here to answer any questions—please don’t hesitate to call or email.
Zack
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