AREN - 180 Degree Capital Q4 2023 Shareholder Letter

2024-02-21 11:55:00 ET

Summary

• 180 Degree Capital is a closed end fund and RIA focused on investing in under valued micro cap companies and providing assistance through constructive activism.
• Persistent predictions of a return to arguably more normal interest rates have not led to an economic calamity - instead, GDP rose 3.1%, wages and salaries grew 4.7%.
• Despite strong macroeconomic trends in 2023, somehow a basket of microcap companies that comprise the Russell Microcap Index underperformed the NASDAQ 100 by over 4600 basis points.
• We expect that many of our holdings which are trading at historically low valuation levels, have a long runway torise in value and help us increase our net asset value per share.

Fellow Shareholders:

This "recession," which has been one of the drivers of capital away from risk assets to perceived safer assets, has been the most fun and awesome one ever. Persistent predictions of a return to arguably more normal interest rates have not led to an economic calamity. Instead, GDP rose 3.1%, wages and salaries grew 4.7%, real private fixed investment in manufacturing structures reached all-time highs and employment remains strong. I didn't live through the 1929 recession, but I did experience the near depression in 2008, and 2023 seemed eerily similar to those years…. NOT!...

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