Category: Quarterly Letter
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2025 Q4 Investor Letter: Long Live Value Investing!
As we start a new year, it is important to look back and examine the last two decades – a period which saw the Great Financial Crisis, hopefully a once in a lifetime event followed by an unabated expansion cycle with few hiccups here and there. For half the working population, economic crises and recessions…
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2025 Q3 Investor Letter: Victory Loves Preparation
We are now at the highest level of market concentration in over a century with the top 10 stocks accounting for 40% of S&P 500 market capitalization. Since the launch of ChatGPT, 75% of S&P 500 returns and 90% of capital spending growth is accorded to AI-related stocks.
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2025 Q2 Investor Letter: Concentration Breeds Fragility
Despite years of technology companies tightening their grip on US equity indices, we remain surprised by how much narrower the market becomes with each passing quarter and by how little attention investors pay to the risks embedded in today’s mega-cap valuations. Nvidia’s surge beyond a $4 T market value makes the current concentration unmistakable. The…
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2025 Q1 Investor Letter: Manufacturing Confusion
Given the last few weeks, it is hard not to wonder what exactly US trade policy is, or what it is intended to be. Is the goal to lower consumer prices? Is it to punish geopolitical or economic rivals for unfair practices? Is the long-term strategy to bring manufacturing jobs to America? Depending on the…
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2024 Q4 Investor Letter: Prudent Capital Stewards
In perhaps the most meaningful political shakeup since the founding of our firm, American voters reelected Donald Trump in the 2024 election. Though not a landslide, Trump’s victory was broad. Much of the country lurched rightward in a repudiation of the perceived failures of the Biden administration on a host of issues. Voters handed the…
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2024 Q3 Investor Letter: Uncommon Quality
If the entire country became securities analysts, memorized Benjamin Graham’s Intelligent Investor and regularly attended Warren Buffett’s annual shareholder meetings, most people would, nevertheless, find themselves irresistibly drawn to hot initial public offerings, momentum strategies and investment fads. People would still find it tempting to day-trade and perform technical analysis of stock charts. A country…
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2024 Q2 Investor Letter: Stick To Your Plan
Looking out onto the landscape of US markets, we wondered to ourselves what might have changed in the last quarter to push market concentration to this high a level, further surpassing previous peaks back to the 1960s. We saw enough of a difference between the Growth and Value components in the market that we were…
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2024 Q1 Investor Letter: Valuation Matters
Here is a thought experiment: close your eyes and imagine a world where the stock market consistently hits new highs during a decade-plus bull market. Now ask yourself, are current interest rates higher or lower than their long-term average? By how much? Try another one: close your eyes and imagine that interest rates today are…
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2023 Q4 Investor Letter: Magnificent Value
As value investors, we rarely find ourselves ensconced in the world of trillion-dollar market caps or triple-digit P/E ratios. However, the 2023 performance of the “Magnificent 7” US stocks was so strong that we could not help but be astounded. These seven businesses now have a combined market cap of $12 trillion, having gained a…
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2023 Q3 Investor Letter: Higher for Longer
Princeton Value Partners has now completed our third full year of investment operations. As we reflect on our results, it is hard not to be struck by how different the world is today from when we opened our doors. In September 2020, the world was grappling with the staggering challenges of a global pandemic, the…