BSY - Headwaters Capital's Q4 2021 Investor Letter

• Headwaters Capital Management is an actively managed, concentrated investment strategy focused on small and mid-capitalization stocks. The strategy seeks to invest in a small number of industry-leading companies with sustainable competitive advantages and the opportunity to generate durable, long-term revenue growth.
• Despite a preference by the market in 2021 for the current hot themes of inflation and commodities, I believe it is best to avoid chasing these themes since they do not fit within the investment framework of the portfolio (sustainable, long-term earnings growth).
• While I certainly would prefer to outperform the market every year, sometimes it is equally as important to minimize potential long-term damage to client capital that can be caused by chasing short-term performance.

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