Dear Partner,
In the fourth quarter of 2020, Woodbridge Capital Partners (the “Partnership”) returned 24.36% while the S&P 500 returned 11.69%.
2020. What a year. I have no doubt that it is one we will never forget. It has been the year of the unexpected, the unthinkable. A global pandemic. The shuttering of entire economies. The fastest crash and recovery the stock market has ever seen. Despite the soaring of the stock market to new heights, the economy has not returned to pre-pandemic levels and a blow has been struck to the financial health of the nation. Deficits have exploded as money has flown off the presses. Asset prices have risen, causing investment opportunities to deteriorate. Yet, I have the utmost faith in the ability of the American economy to continue its march forward.
The uniform, constant and uninterrupted effort of every man to better his condition is frequently powerful enough to maintain the natural progress of things toward improvement, in spite both of the extravagance of government, and of the greatest errors of administration.
– Adam Smith
Smith wrote those words nearly 250 years ago. They are as true today as they were then. In the last century, this country has survived two world wars and now two global pandemics as well as the politically motivated and often economically harmful agendas of policymakers along the way. This year will not be the last bump in the road we face, nor have the consequences of this one, and our response to it, fully materialized. Things will continue to change, and almost certainly in ways that we could never predict. But mankind has an incredible ability to adapt and persevere.
My grandmother, quoting the Bible, would always say, “Consider all things and hold fast to that which is true.” We believe the best way to protect ourselves in a world where the unexpected is always happening is by holding fast to the truth that businesses which make things and provide services people want and need will always have value. That truth is what has carried us through this year and what will carry us through many more years to come.
That being said, we did not outperform the S&P in every quarter of this year. We will not outperform the S&P in every quarter in the future. Indeed, we likely will not outperform the S&P every year. In order to beat the market you have to do things differently than the market, which often entails zigging when the market zags. However, despite the volatility we faced this year, not a single dollar was redeemed from the fund. We are very grateful to have partners with such patience and such a long-term view. We thank you for the opportunity to be the stewards of your capital and we remain committed to your investment success.
Sincerely,
Jesse Flowers & Kyosuke Mitsuishi