“When it rains it pours” is one of the more common expressions in our vernacular. Its near ubiquitous meaning implies that situations often occur in rapid succession or even all at once. In our line of work we strive for consistent, predictable net returns, by mapping out the coming months and quarters for markets (macro) and catalysts (micro) for the individual securities in our portfolios. We then allocate capital in the manner that most appropriately balances the risk & reward potential from our opportunity set.
But sometimes when it rains, it pours, and September was one of those times. Our funds posted their best month in recent times and the success we achieved to close out the third quarter can be attributed to a confluence of events impacting positions that ironically played out within the same 30 day period. So before tabling our view on market prospects for the fourth quarter of 2018 let’s review what contributed to September’s performance.