Mutoro Group Partners, LP
“By their fruits you will know them.” – Matthew 7:16
Dear Partner,
The Fund was up 5.11 per cent for the first quarter of 2016. To put this in perspective, during the first three months of this year we made back our losses from all of last year. While this is positive, we should take this news in stride. I discourage us from being despondent when short-term results are not in our favor or too enthusiastic when they are. I manage our capital for the long-term, so I expect and recommend that partners in the Fund judge my performance over a period of five years or greater, not five months or less. At times like this I try to remember the counsel of the investor Michael Burry. In a 2001 letter to his limited partners, he wrote:
The goal here is long-term capital appreciation, with the emphasis on long- term. Therefore, while the fund may yield surprising results over short time frames, this phenomenon neither concerns me when the results seem cause for lament nor lifts me when the results seem cause for celebration. I urge the same reactions in you.
You should expect to see a favorable trend after five years as you harvest the gains of your investment, which I intend to deliver. But we are not there yet. We are still planting seeds.
This is especially true if we remember that we hold significant cash. Our best days are ahead of us, irrespective of volatility in the broader markets or any of our individual holdings. The chart below depicts the makeup of the Fund on March 31st.
Portfolio Holdings
When you have cash, volatility just represents opportunity. We continue to take advantage of lower quoted prices to reduce the average cost of our holdings, which are operating well. We thus are likely to benefit disproportionally when prices turn upwards and our businesses become less cheap.
Please find attached with this letter our final 2015 Financial Statements which were prepared by our administrator, NAV Consulting Inc., and independently audited by the accounting firm Spicer Jeffries LLP. Both NAV Consulting and Spicer Jeffries are well- known and respected third-party service providers to investment partnerships, both established funds as well as young and growing ones such as ours. At 16 pages, the financial statements are a quick-read, which should come as no surprise. I try to run our operations leanly so I can maximize the time I spend finding investment ideas for our portfolio and, more importantly, so that your annual expenses as a limited partner are capped at 1.5 per cent.
The Fund can accept new capital every month. If you would like to make an investment, please let me know. And feel free to call or write me if you have any questions or need further clarification on any matter discussed above.
Sincerely,
Godfrey M. Bakuli
Managing Partner