The third quarter of 2023, I’ve consolidated my holdings to seven positions. There are a few sectors that I believe will help me generate alpha over the long term. I’ve also become more cogent about how to deploy capital. In the past, I would deploy capital into one or two positions. Now, I’m deploying it evenly among all of my holdings in a percentage-weighted way. After two straight quarters of double digit growth, there was a pull back of -5.13%. This was expected to come at some time since everything can’t be right and up into the corner, day after day, year after year. I’m still hoping to end the year in the green. As of the end of the third quarter, I have returned 38.81% in capital appreciation. This year might be the best year for James Capital since its inception in 2020.
The last three months of the year will come and go quickly. I don’t anticipate making any major moves but will continue with steady capital deployment into the sectors I’ve identified as winners. There might be some chances for tax-loss harvesting but it’s too early to tell but will confirm in the next quarterly newsletter. This will also be the first year in which I plan to take a yearly bonus from James Capital. The bonus structure is similar to that of many hedge funds. It will be 1/4 of the YTD (e.g., if James Capital returns 20%, the bonus payout will be 5%). This will create an evergreen fund of sorts. Negative YTD returns means no payout.
It’s been rewarding to write and learn about investing. I hope that at the end of the day, we can all build wealth, slowly, and enjoy it along the way.
As always, thanks for reading and feel free to share with those interested in learning.
Daviel James
James Capital