| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 0% | 0% |
Sorfis Investments delivered positive returns across strategies in 2025, with Diversified Strategy returning 7-15% and Absolute Return Strategy achieving 13-18%. As self-described value investors, they experienced typical value stock patterns: strong Q1 performance, underperformance after Liberation Day, and solid year-end gains. The manager emphasizes three key themes: AI's transformative potential driving unprecedented capital expenditures in data centers and infrastructure, the continuation of their value investing approach finding opportunities outside major indices, and expectations for returning market volatility to create additional opportunities. Key concerns include record S&P 500 valuations and concentration levels that historically precede flat or negative decade-long returns, plus uncertainty around AI spending returns and duration. The firm trimmed overvalued positions and added during volatility periods, with positioning decisions influenced by tax considerations across account types. Looking forward, they maintain their disciplined value approach while preparing for eventual market volatility and bubble corrections, drawing lessons from Warren Buffett about patience and opportunistic investing during market dislocations.
Value investing approach focused on finding opportunities outside major indices while maintaining discipline and patience, particularly as markets face record valuations and unprecedented AI-driven capital expenditure cycles.
The manager continues to find good value outside of major indices and expects to find more opportunities if volatility returns to markets, as it eventually always does. They maintain a cautious stance given record valuations and concentration levels.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 30 2026 | 2025 Q4 | BRK-A | AI, Capital Expenditures, technology, Valuations, value, volatility | - | Value-focused manager delivered solid 2025 returns while navigating record market valuations and AI-driven capital expenditure boom. Trimmed expensive holdings, added during volatility, and continues finding opportunities outside major indices. Expects eventual market volatility to create more value opportunities while maintaining disciplined approach amid unprecedented technology spending and concerning valuation levels. |
| Feb 24 2025 | 2024 Q4 | - | AI, Consumer Staples, defensiveness, international, technology, Valuations, value | - | Sorfis delivered solid returns despite value underperforming growth in 2024's second half. With S&P 500 at historic valuation peaks and corporate bankruptcies rising, they're positioned defensively while seeking opportunities in international markets and Consumer Staples. The manager views current market conditions as unsustainable but remains optimistic about finding value in less popular stocks away from overpriced indices. |
| Feb 20 2024 | 2023 Q4 | ARKK, BRK/B, META, VTV | growth, Meta, returns, Strategy, value | META | Value-focused manager delivered solid 2023 returns driven by Meta position bought at extreme discount in late 2022. Emphasizes price-driven risk assessment over growth narratives, maintaining tortoise-like approach prioritizing capital preservation. Two-year returns show value's resilience despite 2023 underperformance versus growth stocks. |
| Jan 5 2023 | 2022 Q4 | BRK/B | Berkshire, Bonds, Fed, inflation, Recession, value | - | Sorfis delivered positive returns in 2022's challenging environment through value-focused positioning. Their Absolute Return Strategy gained 2-13% across all accounts, driven by Berkshire Hathaway and energy overweights. While acknowledging continued valuation risks entering 2023, the manager emphasizes that government intervention creates different dynamics than previous market peaks in 1929 and 2000. |
| Jan 10 2022 | 2021 Q4 | - | diversification, inflation, rates, risk management, value, volatility | - | Sorfis Investments warns of much lower future returns given near-zero rates and all-time high valuations. Manager advocates survival-first approach through diversification rather than risk-taking, while gradually building concentrated positions in mispriced opportunities. Expects higher inflation from unprecedented monetary support and emphasizes capitalizing on inevitable volatility for returns and tax management. |
| Jan 26 2021 | 2020 Q4 | - | Concentration, interest rates, positioning, retail trading, technology, Valuations | - | Sorfis plans higher concentration in best ideas while avoiding overvalued technology stocks. Manager sees abnormal market conditions from retail trading surge and unprecedented monetary policies. Focus on 3-5 year investments with good returns and downside protection, emphasizing what to avoid rather than macro forecasting in uncertain environment. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
Live SportsManager sees significant value in sports teams and entertainment assets, citing strong viewership numbers and global interest. Recommends Atlanta Braves, Madison Square Garden Sports, Manchester United, and Rogers Communications as undervalued relative to private market values. Views sports as hot investment category with institutional interest growing. |
Sports Teams Entertainment Media Rights Valuation |
MediaBullish on media companies with sports content and live programming. Fox benefits from NFL and MLB rights plus World Cup coverage. Versant Media Group seen as attractive post-spinoff opportunity trading below intrinsic value. Focus on companies with live sports and news content that command premium advertising rates. |
Broadcasting Content Advertising Spinoffs | |
Natural GasPositive on National Fuel Gas due to strategic Appalachian Basin acreage and regulated utility operations. Company expanding through Ohio acquisition while maintaining conservative management approach. Natural gas provides 40% of US electric power with Appalachian reserves strategically located near population centers. |
Utilities Energy Infrastructure Reserves Regulation | |
AIAcknowledges AI as transformative technology that is accelerating and changing economy and society. However, warns of potential disappointment for investors and compares to late 1990s tech boom with multiple speculative solutions. Expects volatility and potential selloff in AI-related stocks including Magnificent Seven. |
Technology Disruption Valuations Volatility | |
AerospaceSees value in Albany International's aerospace composites business, particularly lightweight components for LEAP engines. Company exploring strategic alternatives and potential spin-off of structures assembly business. Views aerospace segment as undervalued relative to mature paper business. |
Defense Composites Restructuring Valuation | |
| 2024 Q4 |
ValueManager positioned equity exposure toward value and away from growth throughout 2024. Value outperformed from January through July but detracted from performance as growth indices outperformed value by approximately 25% during the rest of the year. The manager continues to focus on getting good value for money when investing clients' capital. |
Value Growth Valuations Discrepancy Attractive |
AIThe manager discusses the dominance of artificial intelligence narrative in driving market concentration, with the Mag 7 tech names contributing to the S&P 500's highest concentration levels. Staggering capital expenditures by big tech companies for AI infrastructure are noted, though the manager questions whether benefits will accrue to companies or flow through to customers. |
AI Technology Capital Expenditures Infrastructure Mag 7 | |
CryptoThe manager notes that 2024 saw a meme coin craze in the cryptocurrency market, drawing parallels to the meme stock craze of 2021. Both years exhibited overlapping euphoria in both cryptocurrency and stock markets, contributing to speculative market conditions. |
Crypto Meme Coins Speculation Euphoria | |
| 2023 Q4 |
ValueManager emphasizes value investing philosophy throughout, stating they lean toward the value end of the spectrum instead of growth. Cites value's outperformance during 2022 more than making up for underperformance in 2023 when considering two-year returns. Aims for results that resemble value proxies like Berkshire Hathaway and VTV. |
Value Berkshire VTV Undervalued |
AIManager acknowledges AI hype drove Meta's performance but states he has no idea how AI will play out and has little opinion on it. Notes AI-hype drove up multiples higher than business progress might have justified. Views AI as uncertain but not central to investment thesis. |
AI Artificial Intelligence Meta Hype | |
Social MediaMeta Platforms was the critical factor in making 2023 great for the Absolute Return Strategy. Manager bought Meta at end of October 2022 when it was trading at less than 10x peak earnings. Believes the core businesses are profitable and competitively advantaged despite uncertainty around Metaverse and AI investments. |
Meta Social Media Facebook Platforms | |
| 2022 Q4 |
ValueValue strategies finally outperformed in 2022 after years of underperformance. The Vanguard Value ETF declined only 2% during the year while growth and tech stocks fell significantly more. Berkshire Hathaway, a core value holding, posted positive returns of 3.3%. |
Value Outperformance Berkshire |
RatesInterest rates rose from near zero levels, contributing to significant bond market declines. The Bloomberg U.S. Aggregate Bond Index fell 13%, its worst performance since 1994. Higher rates created challenges for both stocks and bonds simultaneously. |
Interest Rates Bonds Fed | |
InflationThe Fed is working to bring down inflation quickly, but the lag between higher inflation and interest rates and their impact on corporate profit margins adds to recession risk. This creates uncertainty about the economic outlook. |
Inflation Fed Margins | |
| 2021 Q4 |
InflationManager expects higher inflation as a potential long-term effect of unprecedented government and central bank pandemic support. Notes that current trends suggest inflation may be one consequence of the experimental monetary and fiscal policies implemented during the crisis. |
Inflation Monetary Policy Central Banks |
RatesManager emphasizes that interest rates are close to zero and expects this low-rate environment to constrain future returns. Discusses how rates have drifted lower over the 13-year period, allowing bond gains, but notes proceeds have been reinvested at progressively lower rates. |
Interest Rates Bonds Returns | |
VolatilityManager views volatility as inevitable and essential for improving returns and managing taxes. Emphasizes the importance of taking advantage of volatility when it arises, noting that while it doesn't feel good, it provides opportunities for disciplined investors to enhance performance. |
Volatility Tax Management Active Management | |
| 2020 Q4 |
Retail TradingThe manager discusses the rise of retail traders in 2020 and early 2021, noting increased daily trading volumes and extreme price movements in stocks favored by message board traders. He questions whether this development is good or bad but acknowledges it's not normal market behavior. |
Retail Trading Volume Message Boards |
Technology ValuationsThe manager expresses concern about technology stock valuations, suggesting they require believing impossible things to expect positive returns at current prices. He advises avoiding many technology-related investments either directly or through ETF portfolios. |
Technology Valuations Overvalued | |
Interest RatesThe manager notes that interest rates hit all-time lows and approached zero, then went negative. He observes that countries previously thought insolvent can now issue bonds at lower rates than the United States, highlighting unprecedented monetary conditions. |
Interest Rates Monetary Policy Central Banks |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Feb 20, 2024 | Fund Letters | Sorfis Investments | META | Meta Platforms, Inc. | Internet Content & Information | Interactive Media & Services | Bull | NASDAQ | Artificial Intelligence, capital allocation, contrarian, low valuation, Metaverse, social media, technology, value investing | Login |
| TICKER | COMMENTARY |
|---|---|
| BRK-A | Miles mentioned that he had been a long-term shareholder of Berkshire Hathaway and had never sold his shares. Over roughly twenty-five years, his investment compounded at about 10.9% annually. The first dollar he invested became approximately thirteen dollars. Since around 1990, Berkshire has only marginally outperformed the S&P 500. By Buffett's own historical standards, this period could be described as mediocre. And yet, admiration for Buffett has not faded—if anything, it has intensified. |
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