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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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ValueWorks Capital 2023 Q2 Investor Letter | Buyside Digest

Back to Fund Profile (ValueWorks Capital)

Primary Source Intelligence • Q2 2023 Letter Analysis

ValueWorks Capital Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, ValueWorks Capital. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD+5.36%

YTD+5.87%

Annualized+1%

Positioning StanceConstructive

GeographyUS

Digest Analysis

Quick Take

"The value-focused fund holds concentrated positions in energy and technology names while manager Lemonides weighs two inflation scenarios that could determine whether recent market gains continue or reverse in coming months."

Executive Summary

ValueWorks Capital Appreciation returned 5.36% net in Q2 2023, bringing YTD returns to 5.87% versus 16.89% for the S&P 500. Manager Charles Lemonides notes the dramatic reversal from 2022 market dynamics, with technology rebounding strongly while commodity-oriented stocks declined. The fund maintains its value investing approach of buying quality assets at 50-75 cents on the dollar, holding concentrated positions of 3-5% each across 25-35 names. Top holdings include energy names like Chord Energy and Cheniere Energy, alongside technology positions in Micron and Qualcomm. Lemonides presents two inflation scenarios: continued decline allowing the Fed to reach targets without economic damage, or sticky wage inflation requiring policy tightening that could reverse recent market gains. The manager acknowledges this remains an open question despite the six-month rebound. Portfolio construction emphasizes educated security selection over diversification, with anticipated holding periods of 1-2 years and modest turnover.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

68%

CautiousHigh

Moderate (68%)

Fund demonstrates moderate-high conviction through concentrated portfolio structure with 3-5% position sizes across 25-35 holdings. Manager names top 10 positions and articulates clear value investing framework. However, significant hedging on macro outlook and acknowledgment of uncertainty prevents higher score.

Growth Outlook

0%

BearishBullish

Bearish (0%)

Manager presents balanced view with two equally plausible scenarios - inflation declining without economic damage versus sticky wage inflation requiring policy tightening. Explicitly states this remains an open question with no clear directional bias.

Risk Appetite

10%

DefensiveAggressive

Defensive (10%)

Portfolio appears fully invested with concentrated 3-5% positions across 25-35 holdings. No mention of cash raising or defensive positioning, but also no evidence of increased risk-taking or leverage deployment.

Capital Deployment

0%

De-riskingDeploying

De-risking (0%)

No specific information provided about cash level changes or deployment activity during the quarter. Portfolio appears fully invested but no evidence of net deployment or de-risking activity.

Forward Guidance

0%

CautiousExpansionary

Cautious (0%)

Manager explicitly acknowledges uncertainty about which scenario will play out and provides no clear directional guidance for future positioning. Maintains neutral stance on deployment decisions.

Language Signal

45%

BearishBullish

Balanced (45%)

Language is slightly more cautious than bullish, with multiple references to risks, potential market reversals, and the possibility of hitting new lows. Balanced by some positive economic data points but net slightly negative in tone.

Perceived Risk

65%

Low RiskElevated

Elevated Risk (65%)

Manager identifies meaningful macro risks including sticky wage inflation, potential policy tightening, and possibility of market reversals to new lows. Discusses specific scenarios where recent gains could be given up, indicating moderate-high risk perception.

Opportunity Density

45%

ScarceAbundant

Selective (45%)

Manager maintains value investing discipline seeking 25-50% undervalued securities but provides no commentary on current opportunity set abundance or scarcity. Concentrated portfolio suggests selective approach but no explicit discussion of opportunity density.

Time Horizon

55%

Short-TermLong-Term

Multi-Year (55%)

Manager states anticipated holding period of 1-2 years with modest portfolio turnover. This represents a medium-term approach, neither short-term trading nor long-term permanent capital, placing it in the middle of the range.