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Appleseed Fund’s Q1 2019 Investor Letter

Appleseed Capital is a Chicago, Illinois-based research-driven boutique asset management firm that was founded back in 1990 as the institutional investing group of Pekin Hardy Strauss Inc. The fund looks for undervalued stocks to invest in and holds them for a longer period aiming to benefit in time. It provides its services not only to individual investors but also to endowments, family offices, foundations, registered investment advisors, etc. Recently, Appleseed Capital published its investor letter, which you can find below. Among other things in the letter, the fund reported a return of 5.28% for Q1 2019, underperforming MSCI World Index which gained 12.48%.


“Dear Shareholders,

“Those who have knowledge, don’t predict. Those who predict, don’t have knowledge.”


In our shareholder letter from last quarter, we discussed the drivers for the stock market downturn during Q4 2018. We suggested that monetary tightening from central banks across the world was the primary culprit in deflating equity prices at the time. Specifically, we postulated that markets would remain weak without a reversal in monetary policy. And, in January 2019, the Federal Reserve did a stunning about-face and reversed its tightening stance. Quantitative tightening is scheduled to end soon, and further interest rate hikes appear to be out of consideration, at least for now. This policy reversal helped to drive the U.S. equity markets to the best start to the year since 1998.

The Federal Reserve’s reversal also sparked rising bond prices, and the corollary to higher bond prices is lower interest rates. However, a particularly foreboding sign raised its ugly head in the debt markets for the first time since 2007 − the U.S. Treasury yield curve inverted in late March 2019. Historically, this unique anomaly has occurred when GDP growth is slowing, when the risk of recession is increasing, and when investors expect central banks to reduce short-term interest rates –much like we discussed at length in our January investor letter.”

You can download a copy of Appleseed Fund’s Q1 2019 Investor Letter here:


You can also see the list of our 2019 Q1 investor letters and download them on this page.

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