Dodge & Cox shareholder letter: "A long-term investment horizon is particularly important in the face of volatility. In our experience, some of the best investment opportunities are created during periods of uncertainty."
In last year’s annual letter to shareholders, we concluded that going forward, “outperforming the S&P 500 (Standard & Poor’s 500 Index) at all given this valuation landscape will be a formidable challenge.” Indeed, 2007 turned out to be the first year since 1999 in which the Fund underperformed the S&P 500. The Fund returned 0.1% in 2007 compared to 5.5% for the S&P 500. At year end, the Fund had net assets of $63.3 billion, including a cash position of 1.3%.
Longer-term results appear on page three. As you can see, over the past 20 years the Fund has returned an annualized 14.2% compared to 11.8% for the S&P 500.
As valuations in the market and the Fund have dropped, our return outlook for the next three-to-five years has improved. At year end, the Fund’s forward price-to earnings ratio was 12.9 times compared to 16.3 times for the S&P 500. We are finding attractive investment opportunities and have lowered the Fund’s cash position to 1.3%. We also remain encouraged about the long-term prospects for the global economy.
Read the complete report
In last year’s annual letter to shareholders, we concluded that going forward, “outperforming the S&P 500 (Standard & Poor’s 500 Index) at all given this valuation landscape will be a formidable challenge.” Indeed, 2007 turned out to be the first year since 1999 in which the Fund underperformed the S&P 500. The Fund returned 0.1% in 2007 compared to 5.5% for the S&P 500. At year end, the Fund had net assets of $63.3 billion, including a cash position of 1.3%.
Longer-term results appear on page three. As you can see, over the past 20 years the Fund has returned an annualized 14.2% compared to 11.8% for the S&P 500.
As valuations in the market and the Fund have dropped, our return outlook for the next three-to-five years has improved. At year end, the Fund’s forward price-to earnings ratio was 12.9 times compared to 16.3 times for the S&P 500. We are finding attractive investment opportunities and have lowered the Fund’s cash position to 1.3%. We also remain encouraged about the long-term prospects for the global economy.
Read the complete report
