January 2017 Commentary

Dipsea Capital Fund LP 

 

 

 

January 2017 Commentary: 

  

The Dipsea Capital Fund returned .78% to clients for the month of January, its 6th consecutive, positive monthly return.  Of the 20 trading days in January, the fund generated positive returns 85% of the time.

 

As we enter a new year, it’s clearly an unprecedented environment in many regards.  Irrespective of one’s political persuasion, there’s little debate that disruption is taking place in our nation’s political landscape.  Conversely, the broad market indexes don’t yet seem to care.  In fact, the S&P 500 index has now gone 36 Days without a 1% intraday move, the longest streak in history.

 

We remain cognizant of the issues that could continue to bolster growth, sentiment, and ultimately push the markets higher.  We are also mindful of the significant headwinds facing further price appreciation.  Ultimately our success in the markets has been well served by not possessing strong opinions, but rather responding and profiting from the inefficiencies that emerge over time.  These opportunities remain, grounded upon human nature and the consistency with which participants often react irrationally at the most inopportune times.


 

As we have shared in past commentaries, we believe a portion of one’s portfolio should be actively managed.  This belief is based upon the growing consensus on Wall Street that markets are efficient, and passively managed index funds offer more value.  This week legendary investor Seth Klarman stated, “The inherent irony of the efficient market theory is that the more people believe in it and correspondingly shun active management, the more inefficient the market is likely to become.”


 

We agree and believe our team’s decades of market experience will serve us well as volatility reemerges and greater inefficiency, (opportunity), presents itself.


 

Kindly accept the appreciation of our whole team, Gregg, Eddy, Kurt, Austin and myself for the trust you place in us as a steward of your capital.

 

 

Sincerely,

 

Chris Antonio

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