Dear Partner,
In the fourth quarter of 2021, Woodbridge Capital Partners I, LP (the “Partnership”) returned 1.5%, bringing the Partnership’s 2021 return to 41.2%. The S&P 500 returned 11.0% and 28.7% in the fourth quarter and 2021, respectively (with dividends reinvested). Since its inception in April 2020, the Partnership has returned 195.7% compared to the S&P 500’s 83.8%1.
With my grandparents getting older, they have begun the process of selling and giving away the many things that they have accumulated over the years. Among their possessions are a few investments which they recently asked me to help them liquidate: a piece of land, some gold and silver coins, and a handful of physical stock certificates. They have held all of these assets for more than 30 years. Can you guess which asset increased in value the most during their holding period? It was a stock – and not one involved in any cutting edge technology, of which they owned a few. Rather, it was boring old Philadelphia Electric Company.
This anecdote supports one of Woodbridge’s central theses: that stocks make the best long-term investment, particularly those that generate a profit and are priced reasonably with respect to those profits. Through a portfolio of such stocks, we believe Woodbridge offers investors an unmatched opportunity to compound their savings at a high rate of return with a low degree of risk. This is why Kyosuke and I have the majority of our net worth in the Partnership, and why we are never uneasy about a situation that might seem like we are putting all of our eggs in one basket.
We are pleased to report that the Partnership’s total assets increased significantly in 2021, and we are optimistic about 2022. If all goes well, we hope to hit $1 million of assets under management (“AUM”) sometime this year. A little over three years ago, we began with $20,000. The more that our AUM increases, the closer the Partnership gets to being self-sustaining and the closer we get to being able to give the Partnership our undivided attention. If you know anyone who could benefit from our services, we would be happy to speak with them. And, as always, if you have anything you would like to discuss with Kyosuke or I, do not hesitate to reach out. Trust me when I say that we bore our friends and family members to death with talk about investing, so someone who actually wants to discuss the topic is a blessing to us.
Regarding the companies we are invested in, things are going well. Business results invariably correspond with stock price movement over the long term, but rarely do so in the short term. Though not by any means a rule, we have observed that most of the returns we get from stocks come in short bursts of exceptional performance. It is for this reason that we recommend you do not leave money on the sidelines uninvested, especially during periods where we have been underperforming the market.
We are not being patronizing when we refer to our investors as partners. I find it amazing that, through all of our ups and downs over the last few years, we have not had a single dollar withdrawn from the partnership. And many of you through your investment in Woodbridge have achieved results that would make Wall Street veterans jealous. Woodbridge absolutely would not be possible without each of you, and we look forward to another year of working with you.
Thank you,
Jesse Flowers & Kyosuke Mitsuishi