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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Recurve declined 1.5% in September but used volatility to reposition, trimming Carvana profits to add to Brunello Cucinelli and Paymentus. Carvana continues exceptional execution with 45%+ growth while competitors struggle."
Recurve posted a -1.5% net return in September versus +3.5% for the S&P 500, with 6 of 9 positions declining. Despite short-term underperformance, the manager sees exceptional medium to long-term opportunities and was moderately active during the month. The fund trimmed Carvana near $400 to redeploy capital, taking advantage of a short attack on Brunello Cucinelli to increase exposure to 5% and using Paymentus weakness to build a 6% position. Carvana remains the largest holding at 46.6%, continuing to demonstrate exceptional execution with over 45% year-over-year growth while competitors struggle. The company is rapidly expanding its workforce, signaling sustained growth momentum. The portfolio faces headwinds from complex global trade and tariff policies affecting RH and ELF, though both companies maintain best-in-class growth and multiple options to offset impacts. The manager maintains a steady posture while navigating policy uncertainty, using market volatility to opportunistically adjust positioning for long-term value creation.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
Manager demonstrates high conviction through concentrated positioning (Carvana at 46.6%), decisive action during volatility, and strong language about company execution. Clear thesis articulation and willingness to add to positions during weakness indicates strong belief in holdings.
Growth Outlook
Manager expresses optimism about medium to long-term opportunities and sees exceptional potential within the portfolio, but acknowledges current market divergence and complex global trade environment creating near-term challenges.
Risk Appetite
Manager was moderately active during the month, taking advantage of volatility to increase positions in Brunello Cucinelli and Paymentus while trimming Carvana. Shows selective risk-taking behavior and opportunistic positioning rather than defensive posture.
Capital Deployment
Manager was moderately active with tactical rebalancing - trimming Carvana to redeploy into Brunello Cucinelli and Paymentus. This represents selective deployment rather than aggressive capital deployment, with most portfolio remaining stable.
Forward Guidance
Manager explicitly states intention to continue taking advantage of opportunities in dynamic environments and expects continued disruptive growth from key holdings like Carvana. Shows clear bias toward deploying capital into attractive opportunities.
Language Signal
Language includes positive terms like 'exceptional opportunities,' 'amazed by execution,' and 'disruptive growth' balanced against acknowledgment of 'complex environment' and 'unpredictable changes.' Net positive but measured tone.
Perceived Risk
Manager acknowledges complex global trade and tariff environment, technical selling pressures, and industry headwinds affecting auto sector. Recognizes policy uncertainty and unpredictable changes but doesn't express systemic risk concerns.
Opportunity Density
Manager explicitly states seeing 'exceptional opportunities within our portfolio over the medium- to long-term' and demonstrates ability to find opportunities during market volatility and short attacks. Shows selective but meaningful opportunity identification.
Time Horizon
Manager explicitly focuses on medium to long-term opportunities, expects 'continued disruptive growth for many years to come' from Carvana, and states 'Recurve does not optimize whatsoever for short-term performance.' Clear long-term orientation with patient capital approach.
