It's Always Darkest Before Dawn

"...the Fed can’t prevent a bear market in a recession when stocks start from this extreme level of valuation..."

“It’s always darkest before dawn” is a phrase that I muttered under my breath this week while reading the latest investor letter from my friend Mark Spiegel, who has suffered the worst month, November, and worst year, 2024, in his fund's history.

I’ve read hundreds of hedge fund managers over the last 15 years, but only a few have produced letters during their poorly performing years that I could stomach. Many managers, when suffering terrible performance, pepper their letters with self-serving excuses and an inconspicuous inability to admit they were wrong.

As I have learned over the last 10 years – and as I recently admitted in my mea culpa on Tesla last month – sometimes it isn’t worth trying to figure out why you are wrong or why your thesis isn’t working, despite the fact that it makes sense to you. Sometimes you just have to close your eyes, realize for one reason or another you’ve been outfoxed, rip the Band-Aid off, and move on.