FREE - Laughing Water Capital Q4 2020 Letter

• Laughing Water Capital is a concentrated, long-biased investment partnership open to accredited investors.
• Laughing Water Capital returned 28.2% in the 4th quarter after all fees and expenses, bringing our full year net return to 67.9%. As always, individual results may vary, so please reference your personal statement. By way of comparison, the SP500TR and R2000TR returned 12.2% and 31.4% respectively for the quarter, and 18.2% and 19.9% respectively for the full year.
• The Fed is pumping a massive amount of liquidity into the world, and we will only discover the unintended consequences well after the fact.
• For several years mega cap growth stocks have dominated the indexes, but in recent months the pendulum has swung to small cap value stocks.
• In today’s world, the “worst” companies are still capital intensive and cyclical, but the best companies require no incremental capital to provide services that would essentially be considered magic if someone from several decades ago were to see them today.

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