Both the third quarter and September of 2013 finished with a flourish for the Akre Capital managed accounts. For the first nine months of 2013, our composite net return was 20.8% vs. the market measured by the S&P at 19.8%. In both cases, the returns are welcome and outsized! Your individual return does not likely match the composite for reasons you know, which we are happy to discuss.
Since the quarter ended, our nationally elected leadership has created a kerfuffle by failing to reach an agreement on the budget. We have no idea what the ultimate outcome will be, but historically, a compromise of some sort has ALWAYS been reached. From our perch, the current stalemate is not added to the list of things which might trouble us. In fact, we don't currently have such a list. We do note that at some point in the future - maybe a year, maybe ten years - interest rates may rise. As a result, the direction of bond prices will almost certainly be negative. Holding long-dated bonds will likely have an unpleasant outcome. Continue Reading »