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First Quarter 2016 Letter to Investors

Please click here to read our first quarterly letter for 2016 (3-pages) discussing the events of the very recent past. It has been a busy quarter at GreenWood, as I just made my first short presentation to a group of investors in Madrid last Friday. Details of our short position are in the Grove – which is down currently due to some temporary issues allowing non-registered users to view content. It should be back up in the next 12-24 hours. Apologies for the technical issue.
A quick summary of our letter in case you don’t have time to read it right now-
  • Investors must choose between 1) volatility in the short-term and good long-term performance or 2) low-volatility in the short-term and long-term risk of permanent losses
  • “Three billion year periods are occurring more and more frequently as volatility models have routinely been unable to predict future risk”
  • We have never targeted a beta level, even though on a whole, our portfolio has been very conservative (with a beta of 0.60 at March 31). Rather, the more relevant question is how do we respond to volatility?
  • We responded well, and so did our current and new investors
  • Our first short in a long while will be the next major government bailout and the equity is worthless under current operating conditions. Sell-side consensus is ignorant of this and the short interest is very low.

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Disclaimer:

This article has been distributed for informational purposes only. Neither the information nor any opinions expressed constitute a recommendation to buy or sell the securities or assets mentioned, or to invest in any investment product or strategy related to such securities or assets. It is not intended to provide personal investment advice, and it does not take into account the specific investment objectives, financial situation or particular needs of any person or entity that may receive this article. Persons reading this article should seek professional financial advice regarding the appropriateness of investing in any securities or assets discussed in this article. The author’s opinions are subject to change without notice. Forecasts, estimates, and certain information contained herein are based upon proprietary research, and the information used in such process was obtained from publicly available sources. Information contained herein has been obtained from sources believed to be reliable, but such reliability is not guaranteed. Investment accounts managed by GreenWood Investors LLC and its affiliates may have a position in the securities or assets discussed in this article. GreenWood Investors LLC may re-evaluate its holdings in such positions and sell or cover certain positions without notice. No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of GreenWood Investors LLC.

Past performance is no guarantee of future results.

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