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Holly LaFon
Holly LaFon
Articles (8165) 

Chuck Akre's Akre Focus Fund Commentary 4th Quarter 2017

Discussion of markets and holdings

January 11, 2018 | About:

A year ago, we discussed our then-current posture in the market, remarking that we had not participated in the “Trump Rally” at the end of 2016. We observed that the new president was already demonstrating behavior which was generally not something the American public was accustomed to. This was naturally leading to market instability and investor uncertainty.

Much to virtually everyone’s surprise, 2017 turned out to be an exceptional year for investors. However, just last week the Wall Street Journal suggested that many investors had indeed exited the market in whole or in part well before year-end and accordingly did not reap all the market’s good performance.

Our 2017 fourth quarter performance for the Institutional share class was +7.02% compared with S&P 500 Total Return at +6.64%. For calendar 2017, performance for the Institutional share class was +30.86% compared with S&P 500 Total Return at +21.83%.

Just as last year, we are fielding lots of questions about our thoughts on the year ahead of us. There is nothing in our record which suggests that we have any skill in correctly guessing the market’s performance in the coming year. So we do not try. Our view remains that the very best protection for a holder of equities is to own truly exceptional businesses, purchased at attractive valuations, and held as long as the businesses remain exceptional.

We have repeated many times the characteristics which guide us in purchasing and continuing to own these select businesses. We believe it is an approach which is logical, understandable, and repeatable. These characteristics of our investment philosophy and practice help you better understand exactly why we do what we do. It helps with your confidence when the world around us is so frequently unstable.

Thank you for your support of the fund and Happy New Year. Chuck, Tom, & John


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