2020 January CAD
0.41%
MTD
0.41%
YTD
Monthly Performance (net of all fees)
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | YTD | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2020 | 0.41 | 0.41% | |||||||||||
| 2019 | 1.72 | 1.79 | 3.13 | 1.15 | 1.35 | -0.75 | -1.54 | -1.34 | 0.04 | -1.45 | -2.57 | 1.39 | 2.76% |
| 2018 | 6.36 | 4.81 | 0.95 | 0.71 | -0.85 | -1.07 | 2.50 | 1.69 | 3.53 | 0.67 | 0.02 | -0.18 | 20.58% |
| 2017 | 0.27 | 0.05 | 0.35 | 0.25 | 1.39 | 1.45 | 1.77 | 0.12 | 3.27 | 3.61 | 13.96 | 1.96 | 31.51% |
| 2016 | 1.59 | 3.30 | 1.53 | -0.82 | 5.67% |
Risk vs. Return Comparisons Across Indexes
| Month Return | YTD Return | Volatility | Sharpe | Sortino | Beta | Best Month | Worst Month | Annualized | |
|---|---|---|---|---|---|---|---|---|---|
| Caravel | 0.41% | 0.41% | 9.36% | 1.63 | 6.58 | 1.00 | 13.96% | -2.57% | 17.36% |
| S&P 500 | -0.04% | -0.04% | 11.57% | 1.13 | 1.21 | 0.07 | 8.01% | -9.03% | 14.52% | S&P/TSX | 1.74% | 1.74% | 8.59% | 0.82 | 1 | -0.09 | 8.74% | -6.27% | 8.27% |
Dear Partners,
For the month of January, the Caravel Capital Fund Ltd Ltd. appreciated by 0.41%.
January can be characterized as an effort to focus on our core strategies and avoid temptation to jump on the bandwagon. In 2012, a full 2 ½ years after the bottom of the market, I recall telling shell shocked friends two stocks they could buy and not look at. They were Apple and Microsoft… Apple was trading at $70 and Microsoft was at $28. Both had 30% of their entire value in cash and traded for less than 12 times their current earnings (before you removed the cash that could be paid out to you). I was like the crazy guy at the traffic light yelling a conspiracy theory. Today those companies are generating a pile of earnings. The problem now is that every Uber driver, shoe shine boy, and waiter are buying them at 24 times this year’s earnings(Apple) and 34X(Microsoft) and FYI - they are up 450% and 650% from that time. To be clear, we don’t have our head in the sand and we certainly are not oblivious to the amount of cheap capital clamoring for any kind of yield. We are just not getting suckered onto a bandwagon that is not within our mandate or expertise. Buying stocks at all time high PE multiples, with little sign of growth in the future, to turn around and try to sell these same stocks at higher multiples at a future date is not a game we want to play. In my 30+ years I have never seen a leader of a G7 Country be an outright stock promoter. Unless the sun starts rising in the west, this will end like all the other excessive valuations prior, it is just a matter of time.
The returns for January were generated from our merger arb investments, special situation investments, long-short gold portfolio, and lastly an option position we put on in order to hedge against market downswings. Their impact was diminished as a result of holding 20%+ in cash and marking two positions that we felt warranted conservative valuations despite their market prices.
We wish to disclose that our analyst Jack Hidi has made an initial investment into the fund. Good call Jack.
We thank you for your confidence and capital.
Caravel Capital