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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Bretton Fund lagged the market in Q2 2026 by avoiding the unsustainable AI semiconductor boom, refusing to chase Micron up 600% and memory stocks at absurd valuations. UnitedHealth's turnaround added 2.5% after rebounding 80% from crisis lows."
The Bretton Fund returned 10.67% in Q2 2026, lagging the S&P 500's 15.20% due to avoiding the AI-driven semiconductor boom. The managers view the surge in memory and chip stocks as unsustainable, with Micron up 600%, SK Hynix up 500%, and Sandisk up over 3000%. They believe computing power requirements are dropping 50% every few months, making the data center buildout unsustainable. Despite being believers in AI and holding Alphabet as their largest position, they refuse to chase absurd valuations in semiconductors. The quarter's positive contributors included UnitedHealth, which added 2.5% after executing its turnaround plan and rebounding 80% from lows, and American Express at 0.7%. The managers added two new software positions, SAP and Constellation, after AI fears created indiscriminate selling. They paid 16x 2027 earnings for SAP and 13x free cash flow for Constellation, viewing mission-critical enterprise software as relatively insulated from AI disruption. Detractors included TJX, Berkshire, and AutoZone. The managers maintain their disciplined approach, willing to underperform until semiconductor valuations correct.
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