Wedgewood Partners Fourth Quarter 2018 Client Letter

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About: The Charles Schwab Corporation (SCHW), CELG, FB, QCOM, CLB, SLB, Includes: AAPL, BKNG, EW, FAST, GOOG, GOOGL, KHC, PYPL, ROST, TSCO, ULTA, V
by: Fund Letters
Summary

Wedgewood’s underlying equity investment philosophy is predicated on a strong belief that significant long-term wealth will be created by investing as “owners” in companies.

We seek companies that have the following characteristics: A dominant product or service that lacks substitutes; a sustainable and consistent level of growing revenues, earnings and dividends; a high level of profitability, measured by ROE without the use of excessive debt; a strong management team that is shareholde- oriented.

Includes detailed analysis of Wedgewood Partners' positions in Apple, Charles Schwab Corp., Celgene, Facebook, Qualcomm, Core Labs and Schlumberger.

Over the course of 2018, higher interest rates, plus Quantitative Tightening, have started to bite throughout both the economy and financial markets.

Is the market beginning to discount the new playbook of the last gasp of Quantitative Easing, while passing the baton to Quantitative Tightening; beginning, perhaps, to discount both peaking economic and corporate earnings growth?

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.