NNAVW - Laughing Water Capital Q1 2024 Letter

2024-04-18 12:40:00 ET

Summary

• Laughing Water Capital is a concentrated, long biased investment partnership open to accredited investors. Our interests are fully aligned with our partners as nearly all of our personal wealth is invested in our strategy.
• Laughing Water Capital returned approximately 8.4% in the first quarter of 2023 after all fees and expenses.
• We continue to suffer from some unfortunate one-off events, that can best be thought of as “bad outcomes” rather than process failures.
• Despite these often non-economic and always unpredictable setbacks, for the most part our businesses are executing well, and marching toward brighter futures.
• From my perspective, it seems unlikely that mega-tech companies will continue to allow Nvidia to earn massive margins from them forever.

Dear Partners,

Laughing Water Capital ("LWC") returned approximately 8.4% in the first quarter of 2023 after all fees and expenses.i As always, results will vary based on the timing of your investment, which fund you are in, and which class you are in, so please check your individual statements. The SP500TR and R2000 returned 10.6% and 5.2% during this period. As always, we are deliberately doing something different than the indexes, so there is no reason to expect that we will achieve index-like returns; at times we will outperform, and at times we will underperform. However, as a partnership, we are doing everything possible to tilt the odds of outperforming over longer periods of time in our favor.

Perhaps chief among the tools at our disposal to favorably tilt the odds is a long-term view on our investments. We would all be hard-pressed to find a successful investor who does not credit "time" as one of their chief advantages. For the most part, at present, none of our businesses is operating at full power. This is by design, and helps explain why they are available at attractive prices. Importantly, we are not invested in turnaround stories that require management teams to pull rabbits out of hats to succeed....

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