Massif Capital Q1 2025 Letter To Investors

2025-05-02 07:15:00 ET

Summary

• Massif Capital's Real Assets Strategy faced a 2.1% loss in Q1 2025, highlighting high volatility and unpredictable market conditions under the second Trump administration.
• The Trump administration's unexpected diplomatic success in the DRC positively impacted Alphamin, a tin miner, showcasing the unpredictable nature of current geopolitical events.
• The global shift from globalization to geopolitical volatility necessitates careful investment in natural resources, critical infrastructure, and heavy industry to achieve self-reliance and national security.
• Trade wars, particularly between the US and China, are reshaping industrial metals markets, emphasizing the importance of strategic resource allocation and geopolitical alignment.

Dear Friends and Investors,

During the first quarter of 2025, the Massif Capital Real Assets Strategy was down 2.1% net of fees, with gross of fees losses from the long book of 1.2% and short book losses of 0.6%. Since the end of the first quarter, the portfolio has been highly volatile. At the time of writing (Tuesday, 4/28), the portfolio is down 0.09% in April; when this letter is sent out on the afternoon of May 1st, the portfolio will be down closer to 4% for the year. The standard deviation of daily returns from April 2nd through April 28th is a little less than 2%, with an average daily return of 0.0%. Put another way, on any given day this month, we have been up or down 2%, followed by a reversal of the same magnitude the next day.

This month's back-and-forth tendency and the speed at which things change have made writing this letter particularly challenging. Every day has brought a new market-moving headline, which often conflicted with the previous day's headline. While we do not trade on the news, it has been such a fast-moving environment that forming an opinion about the future of the businesses we invest in and the general investment environment has been incredibly challenging. We tend to look to the past and history as a guide in such situations, but find ourselves in uncharted territory. We would suggest that anyone approaching the current investment environment with a great deal of conviction is deluding themselves and running risks with their investors' capital that they are unaware of....

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