Laughing Water Capital Q4 Investor Letter

Laughing Water Capital recently released its Q4 investor letter – you can download a copy below.

The hedge fund, led by Matthew Sweeney, reported a loss of 22.9% for the fourth quarter, bringing the full-year 2018 returns to a loss of 12.3%. Whilst the SP500 and R2000 fell 13.5% and 20.2%, respectively, in the fourth quarter, and 4.4% and 11.0% in for the year.

“The biggest problem that our stocks faced in the fourth quarter is that no one wanted to buy them, while some owners felt the need to sell them. To be clear, we should not completely ignore the macro environment; rising interest rates and uncertainty around trade policy may have unforeseen consequences for businesses and valuations. If we owned businesses that were operating at peak efficiency and selling at lofty multiples, I would be concerned. However, as a reminder, for the most part our companies are presently dealing with some sort of temporary problem. This is precisely why we own them. We shouldn’t care if no one wanted to buy them during the quarter, because we don’t want to sell them until they move past their temporary problems, and are realizing their true potential,” Sweeney, the founder and managing partner of Laughing Water Capital, writes in the letter.

You can down a copy of the letter here.