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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Aquamarine Fund returned 18.6% in 2024, lagging the S&P 500's 25.0% but maintaining long-term outperformance since 1997. Spier focuses on powerhouse brands like Ferrari and share-repurchasing cannibals including American Express and Berkshire Hathaway."
Guy Spier's Aquamarine Fund returned 18.6% in 2024 versus 25.0% for the S&P 500, bringing since-inception annualized returns to 9.4% versus 8.9% for the index. The fund focuses on owning powerhouse brands and businesses with unassailable market positions that regularly repurchase shares, which Spier calls cannibals. Top contributors included American Express, Berkshire Hathaway, BYD Auto, Bank of America, Mastercard, and Ferrari. Ferrari exemplifies Spier's preference for luxury brands with dominant share of mind, benefiting from Formula 1 success and Lewis Hamilton joining the team. BYD surpassed Tesla in revenue while trading at a fraction of Tesla's valuation. Detractors included Nestlé, facing commodity inflation and consumer demand weakness, and Seritage, struggling with real estate redevelopment challenges. New investments included LVMH and The Economist Group. Spier underwent successful medical treatment for a brain lesion but remains focused on building generational wealth through quality companies. The fund manages $433.2 million with aligned fee structures.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
High conviction evidenced by concentrated portfolio with six largest positions representing 75% of capital. Manager provides detailed thesis explanations for each holding, uses strong language about brand power and competitive moats, and explicitly states confidence in long-term destinations despite short-term volatility.
Growth Outlook
Manager expresses mild optimism about long-term opportunities while acknowledging current challenges. Believes underperformance will reverse and sees potential in luxury brands and quality businesses, but also notes headwinds like commodity inflation and real estate market shifts.
Risk Appetite
Portfolio remains concentrated in high-conviction positions with some profit-taking from Ferrari to fund cheaper opportunities. Manager maintains long-term holdings but shows selective approach to new investments, indicating moderate risk appetite.
Capital Deployment
Net redemptions of $9.7 million ($28.9M out, $19.2M in) and cash position of 5.22% suggest modest de-risking. Manager sold Ferrari shares to fund other purchases but notes this hasn't favored the fund, indicating cautious deployment activity.
Forward Guidance
Manager plans to continue current approach with focus on generational wealth building. Limited discussion of specific deployment plans beyond maintaining existing strategy and seeking quality companies at reasonable valuations.
Language Signal
Language is balanced with positive terms like 'powerhouse brands,' 'enormous untapped potential,' and 'exceptional value' offset by risk discussions around commodity inflation, real estate challenges, and market headwinds.
Perceived Risk
Manager acknowledges specific risks including commodity inflation, consumer demand weakness, rising interest rates affecting real estate, and pandemic-driven market shifts. However, these are discussed as manageable headwinds rather than systemic threats.
Opportunity Density
Manager found selective opportunities in LVMH and The Economist Group while noting rich valuations for luxury brands like Ferrari. Emphasis on patience and finding quality companies at reasonable valuations suggests moderate opportunity set.
Time Horizon
Explicitly focused on generational wealth building with 27-year track record. Manager states goal of building long-term wealth 'over many years and for generations to come' and emphasizes companies that will survive across generations. Medical experience reinforced long-term focus.
