No. of Recommendations: 5
It's definitely been a tough year (or two). When DV fist began it was easier to find under-followed and under-valued companies. Looking at the closed position tab shows 100% of our closed positions with nice profits. As the bull market continued it became tougher to find great DV opportunities. The consequence of this was always having a large cash balance and having to search ever harder for companies that fit our strategy. I though I had managed to find 7 companies that fit and I still do think most (or all ?) of them will end up being profitable. But, they have taken much longer than I imagined - many being affected by macro factors that are hard to predict with certainty.

I've used the DV investing style for a decent chunk of my career and, through the ups and downs, have generated strong returns. DV follows a niche strategy that admittedly is not working very well right now. Most of the micro/small cap value funds and investors that I follow are having a similarly difficult time. I'm as frustrated with the state of the current portfolio as much as anyone. Earlier in 2015 when the market started to correct I thought we were going to finally get an opportunity to add new companies and put cash to work. We did put 10% of our cash to work at that time but the correction was short lived.

I'll continue to closely follow our portfolio companies and provide guidance to the best of my ability. At Dv we often take stakes in companies that we know are undergoing some sort of problem. For many of our companies, the problems have gotten worse. But, it is my hope that several of our companies will start to turn over the next year.

Best,
Ron
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