2018 December CAD

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-0.18% MTD
20.58% YTD

Dear Partners,

For the month of December the Caravel Capital Fund Ltd declined by -0.18%

We trust you enjoyed your holiday and the preamble to our December letter. In light of the global stock markets devastating performance last month we wanted you to see what our holiday message looks like with the full year in perspective (Click here). After we watched this to Glen made the profound statement that he would by far rather be up 20% for the year and under perform the stock market by 30% than make nothing and outperform it by 30%. Words to live by!!!!

We are still sitting on a large cash position and hold small risk in the portfolio at the time of writing this letter. The markets were fortunate to get a pivot in the US Federal Reserve’s plan to raise short-term interest rates. The mountain of uncertainty surrounding Trump’s tariff war and its impact on North American companies’ earnings keeps us cautious. In addition, the lack of clarity on global growth continues to keep us from meaningfully redeploying the capital with the necessary confidence. That being said, sometimes we are presented with opportunities we cannot refuse... As we mentioned in our November letter, we felt the bottom of the market was around 2450 on the SP500. This level was reached December 24th around 11:00 am and we invested 5% of the portfolio into the broad US market as well as added to some of our beta names. This window of opportunity existed for exactly 1 trading day (we can’t make this up) before the market snapped back uninterrupted 7 %. If you ever get the chance to purchase 500 of the best companies in the world at 13.5 times earnings when interest rates are sub 3% you don’t ask questions, you do it!!!!! We have exited this position as markets have adjusted to reflect more reasonable values. Our job is not to buy and hold, but to seize opportunities when assets are extremely mispriced. The above trade helped offset the losses we incurred from our fundamental positions we were holding, but this did not take us positive for the month.

We remain closed to new investments for obvious reasons, however we welcome the opportunity to speak to our partners at anytime. Please don’t hesitate to reach out if you have questions or just to reconnect.

We thank you for your confidence and capital.

Jeff & Glen

Monthly Performance (net of all fees)

JanFebMarAprMayJunJulAugSepOctNovDec YTD

Risk vs. Return Comparisons Across Indexes

Month Return YTD Return Volatility Sharpe Sortino Beta Best Month Worst Month Annualized
S&P 500-9.03%-4.39%10.95%0.620.640.25.72%-9.03%8.49%

Growth of $1000 since inception

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