This quarter’s 4-page letter discusses why we’re encouraged about the progress we’ve made on three fronts: 1) in performance (+15.4% in the fund, or 7.2% alpha), 2) further fundamental transformation at CTT which will be more evident in the quarters ahead and, 3) analytical improvements we’ve made to our process.

Speed Read:

  • Perception Inflections are key to driving performance outside of just company fundamentals. We outline how we think about classifying market narratives on individual companies and are now watching to ensure our portfolio has a diversity of behavioral factors in addition to the others I outlined last quarter;

  • Learning from a mistake (Rolls-Royce) this year, we’ve added a “Reflexivity Vulnerability” for every name in our portfolio and are much more closely watching dynamic situations that could bring a stock into an inferior market narrative;

  • Is it worth it? An investor asked us if all the effort we’re putting into CTT is worth it? The answer, more than ever, is definitively yes. The company is in the process of materially upgrading its fundamental trajectory which we believe will lead a material inflection in the market narrative as it looks to become the e-commerce back-end of Portugal, if not the Iberian peninsula.

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