Songbird Asset Management Up 10.21% In 2015

Songbird Asset Management performance commentary for the year ended December 31, 2015.

Basic Math

Happy new year to all! It’s a brand new year and for many investors, leaving last year behind was probably at the top of their wish list for Santa in 2015. Not for us fortunately, we were up 10.21% in 2015 vs. the market benchmark return of -2.90%.

So far this year, the market has been off to a horrible start. But however this year plays out. I’d like to talk about basic investing math, something even a liberal arts major (like me) can understand. Say you start with $100 and you lose 50%. you’re left with $50. To get back to even. you don’t need 50% returns. you need 100%. double the percentage that you lost! 80 when I hear of wild investing strategies that talk about how much you can gain. I worry more about how much you can lose when the markets (inevitably) go down. Because, as basic math shows, it’s harder to get back to even when you’ve lost money.

Michael Mauboussin: Here’s what active managers can do

michael mauboussin, Credit Suisse, valuation and portfolio positioning, capital markets theory, competitive strategy analysis, decision making, skill versus luck, value investing, Legg Mason, The Success Equation, Think Twice: Harnessing the Power of Counterintuition, analysts, behavioral finance, More Than You Know: Finding Financial Wisdom in Unconventional Places, academics , valuewalkThe debate over active versus passive management continues as trends show the ongoing shift from active into passive funds. Q2 2020 hedge fund letters, conferences and more At the Morningstar Investment Conference, Michael Mauboussin of Counterpoint Global argued that the rise of index funds has made it more difficult to be an active manager. Drawing Read More

As we start a new investing year, there are many investment advisors who will try to predict which way the market will go. I predict the market will go both up and down. So, in light of my prediction, basic math tells me that whatever investments I choose. I should care more about protecting the downside than trying to capture every last bit of upside gain. At Songbird, over the last 5 years in the months in which the market was down 1% or more, we outperformed (i.e.. we were down less than the market) roughly 80% of the time.

Songbird Asset Management – Performance Update

For the year 2015, the representative portfolio finished up 10.21% % vs. the market benchmark Russell 2500 Index of -2.90%, outperforming by 13.11%. Since inception 1/1/11 to 12/31/15. the portfolios cumulative gross returns was 100.2% vs. the benchmark of 63.4%. On an annualized basis, we delivered a return of 20.0% per year over the last 5 years.

Songbird Asset Management, LLC, is a private investment firm based in Washington. DC. that specializes in small company public equity investing. We manage a high-conviction focused portfolio of 20 to 30 small company stocks, in separately managed accounts, with the goal of long-term capital appreciation. If you’re interested in learning more, please visit our website or email me at [email protected] Thank you and I hope you enjoyed this small investing insight. Until next month’s newsletter. happy successful investing!