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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"Tweedy Browne delivered strong absolute returns in Q2 2026 but warns of late-1990s bubble conditions as AI mania drives valuations to historic extremes. The manager actively avoids overvalued mega-cap tech, instead positioning in attractively valued European, Japanese, and smaller-cap companies."
Tweedy Browne's International Value Fund returned 6.96% in Q2 2026 and 10.65% year-to-date, outperforming its primary benchmark despite underperforming in the quarter as AI-driven US technology stocks dominated returns. The manager expresses deep concern about rapidly rising valuations reminiscent of the late 1990s bubble, with the CAPE Shiller P/E at 41X and Buffett Indicator at 219%, both near all-time highs. Hyperscalers are pouring billions into AI infrastructure with uncertain returns, creating prisoner's dilemma dynamics. The Fed has pivoted from potential rate cuts to possible hikes due to persistent inflation. Despite these warnings, the manager continues finding opportunities in non-US markets and smaller/mid-cap companies at attractive valuations. Samsung Electronics delivered record semiconductor profits while European and Japanese banks showed improving fundamentals. The Funds remain well-positioned with growing exposure to smaller companies offering better valuations than US mega-cap tech. New positions include Capgemini and bioMérieux at discounts to intrinsic value. The Buybacks, Dividends + Value Fund expanded its mandate to emphasize share repurchases at discounted valuations. If market concerns materialize, the Funds should hold up better than benchmarks; if enthusiasm continues, they will likely still participate.
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