Long Cast Advisers Q1 2019 Letter

|
Includes: CTEK, EVI, INS, QRHC
by: longcastadvisers
Summary

Long Cast Advisers, LLC, is an independent registered investment adviser investing on behalf of individuals, family offices and endowments. It is concentrated on long-term investing, focused on small-cap companies.

Since inception three years ago, LCA has returned a cumulative 96% net of fees, or 22% CAGR, ahead of the baseline market indices.

Includes analysis of Long Cast Advisers' positions in INS, CTEK and QRHC.

I posted LCA's 1Q19 results on my website. It includes brief discussions of three portfolio holdings: INS, CTEK and QRHC. As I wrote in the email that went out...

"Cumulative returns on accounts managed by Long Cast Advisers increased 20% in 1Q19, net of applicable fees. This was better than the baseline market indices. Returns for separate accounts managed by LCA ranged from 17% to 26% for the quarter.

Since inception three years ago, LCA has returned a cumulative 96% net of fees, or 22% CAGR, ahead of the baseline market indices. Because our portfolio is comprised of just a handful of typically very small businesses, it is expected that returns will vary considerably from the baseline.

High returns certainly brings a lightness to the step but a strong quarter like this is really a cautionary tale on small sample sizes, the marginal impact of outlying events and the ability for anyone to look smart doing something right just once in every while. To me, it just illustrates why investors need focus on process, experience, differentiation and repeatability."

If I can simplify what I've learned in my first three years running a growing investment management firm...

you gotta pick the right stocks

you gotta own them at the right weighting;you gotta find clients who appreciate your worldview

you gotta have enough assets to make it all meaningful

and you gotta manage the administrative burden with an eye on time and costs

... it's complicated, but the effort to get it right is energizing.

It remains my desire to grow LCA thoughtfully and incrementally with just a handful of new clients per year. If you would like to talk about my process, experience, differentiation or repeatability, please drop me a line. I very much appreciate those that have and the partnerships made along the way.

Original Post

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