TBB - Giverny Capital Rochon Global Portfolio 2023 Annual Letter To Partners

2024-03-27 11:55:00 ET

Summary

• Giverny Capital is a Montreal-based investment advisor specializing in private wealth management that also offers financial planning services.
• For the year ending December 31st 2023, the return for the Rochon Global Portfolio was 24.3% versus 17.5% for our benchmark, which represents a relative outperformance of 6.8%.
• Since its inception on July 1st 1993, the compounded annual return of the Rochon Global Portfolio has been 14.8% versus 9.3% for our weighted benchmark, representing an annualized outperformance of 5.5% over this period of 30 years.
• The current year will most likely see its share of uncertainties, disappointing economic data and geopolitical (or political) fears.
• We remain tooth and nail convinced that our companies should continue to enrich investors at rates above the average over the long run.

Historical Summary

It has been more than 30 years since I discovered the writings of Warren Buffett, Benjamin Graham, John Templeton, Philip Fisher and Peter Lynch. I then decided to begin managing a family portfolio based on an investment approach synthesized from these great money managers. By the end of 1998, after five years of satisfactory results, I decided to launch an investment management firm offering asset management services aligned with my own investment philosophy. Giverny Capital Inc. came into existence.

In 2002, Giverny hired its first employee: Jean-Philippe Bouchard (JP). A few years later, JP became a partner and participates actively in the investment selection process for the Giverny portfolio. In 2005, two new people joined the firm who eventually became partners: Nicolas L'Écuyer and Karine Primeau. François Campeau, who joined the Giverny team in 2018, also participates in the investment selection process. In 2009, we launched a US office in Princeton, New Jersey. We also partnered with a manager from New York, David Poppe, in early 2020. He manages Giverny Capital Asset Management, based in Manhattan. Our two directors of our US offices, Patrick Léger and David Poppe, share in the culture and long-term time horizon inherent to Giverny.

We are Partners!

From the very first days of Giverny, the cornerstone of our portfolio management philosophy was to manage client portfolios in the same way that I was managing my own money. Thus, the family portfolio I've managed since 1993 (the "Rochon Global Portfolio") serves as a model for our client accounts. It is crucial to me that clients of Giverny and its portfolio managers are in the same boat! That is why we call our clients " partners".

The Purpose of our Annual Letter

The primary objective of this annual letter is to discuss the results of our portfolio companies over the course of the prior year. But even more importantly, our goal is to explain in detail the long-term investment philosophy behind the selection process for the companies in our portfolio. Our wish is for our partners to fully understand the nature of our investment process since long-term portfolio returns are the fruits of this philosophy. Over the short term, the stock market is irrational and unpredictable (though some may think otherwise). Over the long term, however, the market adequately reflects the intrinsic value of companies. If the stock selection process is sound and rational, investment returns will eventually follow. Through this letter, we provide you with the information required to understand this process. We try to be transparent and comprehensive in our discussion. The reason for this is very simple: we treat you the way we would want to be treated if our roles were reversed.

The Artwork on the cover of the 2023 Letter

We illustrate the cover page of our annual letters with a reproduction of a work from the Giverny Capital Collection each year. This year, we have selected a painting by Québec artist Nicolas Grenier entitled " Écho"....

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