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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Longriver delivered 10.8% in 2023 versus 22.2% for the benchmark, hurt by being too cautious early. The manager is betting on corporate efficiency trends like Meta's transformation and trauma-driven opportunities in homebuilding."
Longriver Partners delivered 9.3% net returns in Q4 2023, bringing full-year gains to 10.8% versus the MSCI AC World's 22.2%. The manager acknowledges being too cautious early in the year and missing some obvious opportunities. The portfolio benefited from AMD, Amazon, and TSMC but was hurt by Evolution, HDFC Bank, and Tencent. The letter emphasizes 2023 as a year of corporate efficiency, highlighting Meta's transformation under Zuckerberg and Amazon's evolution under Jassy. The manager made investments in trauma-affected industries like Ashtead (equipment rental) and Vistry (UK homebuilding), betting on the capital cycle where underinvestment creates opportunity. On China, the manager sees a proper bear market with deflation taking its toll, but owns high-quality Chinese companies with overseas growth as a hedge. The fund is now fully invested across 14 holdings with the manager expressing excitement about the portfolio and feeling he has hit his stride.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
The manager runs a concentrated portfolio of 14 holdings with top 10 representing 85% of assets. He provides detailed thesis explanations for specific holdings like Amazon, Vistry, and Moutai, with clear catalysts and sizing decisions. The conviction is evident in his willingness to invest in traumatized sectors and maintain Chinese exposure despite the bear market.
Growth Outlook
The manager acknowledges a bumper year for American stocks with the US achieving a soft landing, but expresses caution about China's bear market and deflation. Mixed signals with optimism about corporate efficiency trends but concern about prolonged challenges in China.
Risk Appetite
The fund moved from being too cautious early in the year to being fully invested by year-end. The manager expresses excitement about the current portfolio and is actively researching new opportunities, indicating a moderate risk-on positioning.
Capital Deployment
The manager explicitly states the fund is now fully invested after being too cautious early in the year, with cash at only 5%. He made new investments in Ashtead and Vistry during the year, indicating moderate deployment activity from a previously more cautious stance.
Forward Guidance
The manager states he is fully invested and excited about the portfolio, with plans to grow Longriver and travel for work. However, he also acknowledges the need for patience given the long-term investment approach and uncertain macro environment.
Language Signal
Language is balanced with both opportunity and risk discussions. Positive terms like 'excited', 'hitting my stride', and 'phenomenal results' are offset by extensive discussion of trauma, deflation, bear markets, and disappointment.
Perceived Risk
The manager discusses multiple risk factors including China's deflation and real estate crisis, phantom valuations masking solvency issues, and the psychological trauma from past crises affecting investor behavior. He acknowledges the portfolio bears little resemblance to the index and shouldn't be expected to correlate in the short term.
Opportunity Density
The manager describes having a good workbench of companies to research and follow, with opportunities in trauma-affected industries and Chinese companies trading at cheap valuations. He expresses excitement about the portfolio and mentions being fully invested, suggesting he sees adequate opportunities.
Time Horizon
The manager explicitly encourages investors to take a long-term view, comparing the investment to real estate or private companies. He emphasizes riding long-term value creation and states the strategy is to invest in companies that can reinvest at high rates of return over time. The focus on capital cycle investing and trauma recovery also implies multi-year time horizons.
