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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"Leaven Partners lost -4.6% in Q2 2026 as markets rotated aggressively into momentum, AI, and speculative growth at extreme valuations, exemplified by SpaceX's $1.8-2.0 trillion IPO. The fund's value-oriented holdings experienced sustained selling pressure despite sound fundamentals."
Leaven Partners declined -4.6% in Q2 2026 as value-oriented holdings experienced an air pocket while markets favored momentum, AI, and semiconductor-related stocks. The fund's cheaper, balance-sheet-resilient businesses saw gradual selling as capital flowed toward prevailing narratives, with stocks exhibiting Growth, Momentum, and Volatility characteristics driving returns. The manager highlights extreme market speculation, exemplified by the SpaceX IPO at a $1.8-2.0 trillion valuation (90x sales) with no projected positive free cash flow before 2035. He draws parallels to historical periods when legendary value managers like John Neff and Julian Robertson faced intense pressure during bubble environments, and notes that even Terry Smith's Fundsmith has abandoned its buy-and-hold discipline after five years of underperformance. Despite acknowledging the difficulty of reporting losses and recognizing that managers are often fired during such periods, Jackson remains firmly convinced that his disciplined value approach will be rewarded in due time. He believes overhauling strategy at peak earnings and valuations would be unsound, maintaining patient conviction in traditional valuation work.
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