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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"MCJ Capital Partners returned 4.83% in Q1 2023, focusing on superior business models like distributors and serial acquirers across international markets. Johnson analyzes housing affordability concerns and banking sector instability while maintaining conviction in companies like Constellation Software and Lifco that demonstrate transferable competitive advantages across fragmented industries."
MCJ Capital Partners returned 4.83% in Q1 2023, underperforming the S&P 500's 7.04% but outperforming the Russell 2000's 2.43%. Since inception in February 2020, the fund has generated 48.72% total returns versus 25.17% for the S&P 500. The quarter was marked by banking sector turmoil with the collapse of Silicon Valley Bank, Signature Bank, and Credit Suisse. Johnson analyzes the concerning housing affordability crisis, noting median home prices have risen 96% since 2010 while household income increased only 50%, creating a price-to-income ratio of 7.54 that approaches Great Financial Crisis levels. The manager dedicates significant commentary to the distributor business model, highlighting its longevity and transferability across industries. Portfolio positioning remains internationally focused, capitalizing on the persistent discount of international equities to U.S. counterparts. Holdings include Constellation Software, Judges Scientific, Kelly Partners Group, and Lifco, representing various applications of superior business models like serial acquisition and distribution.
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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 portfolio of named positions with detailed business model analysis. Provides specific performance metrics for holdings like Lifco and explains strategic rationale for each position. The extensive discussion of distributor business models and clear positioning philosophy indicates strong conviction in approach.
Growth Outlook
Manager expresses cautious concern about housing market vulnerability, banking sector instability, and economic slowdown risks. While not deeply bearish, the tone reflects meaningful caution about macro conditions and potential market stress points.
Risk Appetite
Portfolio remains positioned with international focus and concentrated holdings in specific business models. Manager maintains existing positions but shows measured approach rather than aggressive risk-taking, reflecting selective but not defensive positioning.
Capital Deployment
No specific cash level changes or deployment activity mentioned in the letter. Manager discusses seeing opportunities but provides no evidence of actual capital deployment or de-risking during the quarter.
Forward Guidance
Manager expresses optimism about seeing more reasonable deals in private markets and good public companies approaching fair pricing. States there is plenty to dig into, indicating selective deployment bias and constructive outlook on opportunity set.
Language Signal
Language contains meaningful risk discussion around housing, banking crisis, and economic concerns, balanced against positive commentary on business models and opportunities. Slightly more cautious than bullish in directional language overall.
Perceived Risk
Manager identifies multiple specific risks including housing market vulnerability, banking sector instability, and economic slowdown concerns. Provides detailed analysis of housing affordability metrics and historical comparisons to the Great Financial Crisis, indicating meaningful risk awareness.
Opportunity Density
Manager sees selective opportunities, noting more reasonable deals in private markets and good public companies approaching fair pricing. Describes plenty to research but emphasizes selectivity, indicating moderate opportunity density requiring careful evaluation.
Time Horizon
Manager emphasizes building circle of competence around business models with long shelf life and transferability. Discusses companies like Constellation Software in context of multi-decade business model success. Focus on understanding enduring competitive advantages suggests multi-year investment horizon.
