2020 October CAD
0.57%
MTD
9.28%
YTD
Monthly Performance (net of all fees)
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | YTD | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2020 | 0.41 | -.20 | -1.91 | .74 | 1.66 | 2.25 | 1.26 | 3.13 | 1.10 | 0.57 | 9.28% | ||
| 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 | 0.57% | 9.28% | 8.71% | 1.72 | 6.06 | 1.00 | 13.96% | -2.57% | 16.37% |
| S&P 500 | -2.66% | 2.76% | 15.35% | 0.8 | 0.98 | 0.1 | 12.82% | -12.35% | 12.51% | S&P/TSX | -3.11% | -6.11% | 13.68% | 0.36 | 0.33 | 0.06 | 10.79% | -17.38% | 4.74% |
Horseshoes and Hand Grenades
Dear Partners,
For the month of October, the Caravel Capital Fund Ltd was up 0.57%.
During October’s 31 days, the Standard and Poors 500 index rose by 5.1%, then fell by more than -7.5% to end the month down almost -3%. The SPTSX index rose 2.76% initially, only to finish with a negative -3.1% return. It is not uncommon for North American markets to produce a negative or a positive 3% return in a month. However for markets to rise by 3%+ and then proceed to drop by -7% intra-month is less common than a blue moon. The last blue moon was in 2018, incedently this year North America had a blue moon fall on Halloween for the first time since 1944. During September the fund purchased options that rise in value when markets become volatile, we had also done this in January and they performed well during the February/March -20% downturn. Unfortunately, we had to pay much more this time since most were expecting fireworks going into the US election. Ultimately, we made some money on our hedges, but nothing like we hoped. In addition to reducing overall market exposure, we were able to generate a positive return while markets vacillated between fear and greed. There is an industry expression “investing is sometimes like horseshoes and hand grenades - being close still counts for something”.
At the time of writing, the White house has yet to acknowledge that the people of the United States have decided to change jockeys for the next race. In addition to this France, Germany, and Britain are shuttering their economies to regain control of the Coronavirus pandemic. With Canada not far behind, that makes four of the G7 economies. Meanwhile the country with the largest economy, has a leader focused on dessicrating the one thing that Americans have fought and died over for 240 years – its democracy. The United Sates also enjoys the ignominious acheivment of holding three of the top five most deadly and infectious coronavirus hotspots on the planet - This will not end well. Markets do not react well when developed countries stand by and let thousands upon thousands of people die needlessly. The US has yet to find its breaking point, but have no doubt, it will. Also, keep an eye on the Georgia runoffs as that will be all over the media and will materially affect the direction of these markets… Stay tuned.
We thank you for your continued confidence and capital.
Caravel Capital.