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Fourth Quarter 2015 Commentary and Performance Review

Our portfolio and the stock market bounced back aggressively in the fourth quarter following the Chinese Yuan induced swoon during the third.  We finished the full year in positive territory, substantially ahead of our comparative indices and peer group.

While there has been much gnashing of teeth over the narrowness of the market’s gains this year and in particular, the contribution of the FANG stocks (Facebook, Amazon, Netflix and Google), we refuse to apologize for actually having the gall to own these names in 2015 and for some far earlier.  It’s always easy to see what worked in the rear view mirror, but far harder to discern what’s ahead.   Remember this next time someone gives you excuses or even worse, makes you feel like an apology is due for actually winning.

Let’s be clear.  We are not afraid to part ways with our long term winners when we think the time is right; we’ve done that repeatedly in the past and will do it in the future.  A strong selling discipline is key to our investment process, and has been instrumental in driving our superior long term results.   My business partner, Bill Hoover, likes to say that buying stocks is easy; knowing when to sell is much harder.  I agree.

For further information on the fourth quarter and our investment outlook, please view a printable version of this Review: Broadleaf Q42015.