Nikada "I love inside jokes. I hope to be part of one someday". - Michael Scott (The Office) To My Partners and Friends: Black Bear Value Fund, LP (the "Fund") returned -6.
7% in June and +2.1% YTD. The S&P 500 returned +3.
6% in June and +15.3% YTD. The HFRI Index returned -0.
3% in June and +4.3% YTD. We do not seek to mimic the returns of the S&P 500 and there will be variances in our performance.
Note: Additional historical performance can be found on our tear-sheet. Are the holders of the Magnificent 7 in on some inside joke? Michael Scott may be expressing what some in the active value community may be feeling of late. Note 60+% of the S&P 500 returns come from the Magnificent 7 with half coming from Nvidia ( NVDA ).
We do not own any of those companies and will likely lag if they continue going up in such a dramatic fashion. Several of these businesses seem expensive and rely on aggressive growth assumptions to justify the current pricing. To be fair, these companies have been strong performers, as businesses and stocks, but the law of large numbers and capitalist competition can catch up.
The businesses we own are at extremely attractive prices with safe balance sheets and capable management. Small capitalization/cyclical names have gone down in price across the board as fears of a recession creep in. Our companies produce prodigious amounts of cash and are led by management teams who understand the power of buying back stock cheaply.
Exiting 2020, I felt our portfolio w.
