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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Trump's tariff policies triggered 12% market decline but create value opportunities for patient investors. Manager maintains positions in capital-light businesses like Google/Amazon and cyclical oil investments while adding recession-resistant Constellation Brands."
Glenn Surowiec addresses the dramatic market changes following Trump's global tariff announcement, which caused a 12% market decline in five days. He argues the tariffs are based on flawed economic understanding and will ultimately raise costs while slowing growth, potentially leading to recession and stagflation. The policy uncertainty from frequent administration reversals makes business investment decisions difficult. Despite these headwinds, Surowiec maintains a value-oriented approach, noting Warren Buffett's success in 2025 while other billionaires lost money. The portfolio emphasizes capital-light businesses like Google and Amazon that are less vulnerable to tariffs, oil and gas investments positioned favorably in the capital cycle, and recession-resistant consumer staples like Constellation Brands. He believes Trump is overplaying his hand and expects voter backlash in 2026 midterms could lead to more sensible policies. The manager views current conditions as a potential major inflection point where patient value investors who resist panic should be handsomely rewarded over time.
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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 in value investing philosophy, maintains existing positions despite market turmoil, and expresses strong views on both policy impacts and investment opportunities. Clear positioning decisions and confident outlook despite uncertainty.
Growth Outlook
The manager expresses significant concern about Trump's tariff policies causing economic damage, recession, and stagflation, but balances this with belief that the situation is temporary and will create opportunities for value investors.
Risk Appetite
Portfolio positioning remains largely unchanged with maintained positions in existing holdings and one new addition (Constellation Brands). The manager is neither aggressively deploying nor de-risking, showing selective but steady risk appetite.
Capital Deployment
Limited new deployment with only one new position (Constellation Brands) while maintaining existing holdings. No mention of cash level changes or significant position sizing adjustments, indicating modest but positive deployment activity.
Forward Guidance
Despite near-term concerns, the manager expresses cautious optimism about future opportunities, expects political backlash to drive policy changes, and believes patient value investors will be rewarded over time.
Language Signal
Language contains significant bearish elements (recession, stagflation, economic havoc) but is balanced by bullish value investing themes (opportunities, handsomely rewarded, crucibles of opportunity) and confidence in long-term positioning.
Perceived Risk
Manager identifies multiple significant risks including tariff-induced recession, policy uncertainty, international relationship damage, and potential civil unrest. Acknowledges not having seen the worst fallout yet from current policies.
Opportunity Density
Despite current challenges, manager sees selective opportunities in value investing, particularly in capital-light businesses and cyclical positions. References historical precedents where downturns created significant opportunities for patient investors.
Time Horizon
Strong emphasis on long-term framework, patience, and conviction. References multi-year cycles, compares to historical inflection points like late 90s and 2008, and focuses on being rewarded over time rather than near-term catalysts.
