Monthly Archives: January 2024

2023 was a complete reversal from 2022 in performance for most long only strategies with the notable geographic exception of China. Hedge funds did their job generally and a good number posted exceptional returns. On a market cap weighted basis, the “magnificent seven” were up 70% for the year – while the remaining stocks generated an 8% total return. The equal weighted S&P 500 underperformed the cap weighted index by an astounding 12.4% (the big got bigger).

• If you bought the top 100 performing stocks in the S&P 500 on an equal weighted basis on Jan 2nd last year and held them through the year, you would have been up 68.6%, and beaten the S&P 500 total return by over 40%.
• If you concentrated and picked the top 10 performing stocks on Jan 2nd, and again held them all year, you would have generated a total return of 150.3%, and demolished the “magnificent seven” by more than 80%.
• 8 of the 11 S&P industry sectors were positive, a huge turnaround from 2022 when 10 of 11 were negative. Last year’s hero, energy, generated the second worst sector returns in 2023.
• If you picked the 100 worst performing stocks for the year, you would have to mark your portfolio down 16.1%.
• If you only owned the worst 10 S&P 500 stocks for the year, you would have finished the year down 39.8%.

In 2023, the growth stock train got back on track, in particular anything to do with artificial intelligence.

2024? Do presidential elections influence the stock market? On the one hand, in the fourth year of a president’s term, the market has been up in 20 of the last 24. On the other, you can’t always count on future returns to match past ones. Despite some consistent patterns, election years are no exception.

We would love to hear from you.

Best wishes to all for a happy, healthy and prosperous 2024!

J. Douglas Newsome, CFA

Managing Director, Director of Research

Perkins Fund Marketing LLC

As we start 2024, it is important to give some thought and structure to how you approach conferences, especially the 1:1 speed dating formats. Most have 30-minute meeting slots so how you optimize your time slots is imperative.

Here are some best practices to follow to generate the most ROI from your meetings with investors.

Preparation:

1. Know your investor: Conferences typically provide some limited background as a start. Bolster this information with a review of LinkedIn and any investor databases you may have access to. Do not forget mutual contacts and any common interests, background, etc.
2. Save the trees: Investors are taking 15 or more meetings. They do not want to bring back 15+ presentation decks. Bring a one-pager and possibly a few exhibits to add color to the conversation – but not to hand out.
3. Practice your pitch: a 30-minute meeting is really an 8-10 minute, concise introduction to your strategy. You will have a few minutes to allow the investor to speak at the beginning and time after to ask questions.
4. Divide the pitch: The presentation should be made in chapters including: team (people), philosophy/opportunity, process, portfolio, performance and risk management. You must also be sure to tell the investor how they can invest – on or off-shore, minimum size, etc. as well as how they can (or cannot) redeem.

The “Big” Event:

1. Why are you there? Introduce your fund and strategy and start a relationship. Period.
2. Make it repeatable. If your investor cannot repeat three points about you, your fund will get lost in the shuffle. Remember that investors will conduct 15+ meetings and they will only remember 5-6 of them.Focus on what you want the investor to know about you and then what you want them to remember.Why this strategy/opportunity? Why us? and Why Now?

8 Do’s:

• Take notes on all the questions asked and your follow-up’s
• Offer a coffee or water or snack for the investor and have mints at the table
• Have physical tear sheets and QR code tear sheets available
• Be enthusiastic – if you don’t care, the investor won’t care
• Ask the investor questions during the meeting to better understand their concerns and interests
• Ask for a “60-second” intro from the investor (unless you know them well)
• Ask the investor how much they know about or their experience they have with the asset class or strategy
• At the conclusion of the meeting ask about the best way/time to follow-up

5 Do Not’s:

• Read from slides
• Speak fast or in vague terms
• Interrupt or cut off investor questions or comments
• Avoid answering challenging questions
• Keep the investor past the meeting end time (unless they ask)

Follow-up:

1. Send a thank you follow-up note that references the meeting and any follow-up questions that came about. Do this within days of the event.
2. Add the investors to the distribution list for performance and other updates.
3. Take every opportunity to share your expertise and educate the investor on developments in your market / asset class with regular insights.
4. Ask the investor for feedback. Do not hesitate to ask what the investor’s initial thoughts are on both the strategy and the approach. The investor may have enjoyed the meeting but has zero budget or plans to invest.

Don’t forget to practice.

Happy hunting!

Best regards,

J. Douglas Newsome, CFA

Managing Director, Director of Research

Perkins Fund Marketing LLC