The most significant growth companies in history have all gone through major periods of volatility during their early years as public companies – ours are no exception to that rule.
We believe holding the 25 Best Growth Ideas for long durations means facing periods of portfolio volatility; it is a feature and not a bug of successfully following this particular strategy.
Where other managers might get shaken out of certain positions because they’ve already appreciated 100 – 200% or because interest rates have risen or some other macro reason, we ignore the macro noise and stick to our guns.
We believe strongly that, if you want a portfolio with a few 100-baggers, you can’t be a trader or market timer.
We expect we will hold some of our investments for 10 – 20 years; moments of volatility are blips on an upward rising 20 year line graph.
We suddenly don’t become 30% less intelligent as portfolio managers when our portfolio drops 30% in value; those drawdowns are usually the perfect time for our existing investors to increase their investment in the fund and we encourage them to do so at such times.
For this reason, we believe measuring our Sharpe Ratio vs. other managers or market indices is meaningless; we measure ourselves by our long-term CAGR, our annualized alpha vs. the Nasdaq and our correlation to the Nasdaq.
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