Welcome to the Enhanced Value Fund (EVF) newsletter! With Charts of the Month, we’ll be providing you with occasional updates on EVF and sharing interesting charts that have caught our attention in recent weeks.
If the newsletter is truncated in an email, you can click on "View entire message" and you'll be able to view the entire post in their email app.
EVF updates
2025 kicked off with a bang! EVF continues to outperform the market, yet our top holdings remain deeply undervalued—an opportunity we’re excited about.
It’s a great time to be a value investor. With a sharp focus on individual asset valuations, we can cut through the (abundant) geopolitical noise and stay anchored in fundamentals.
On the people front, we met two promising intern candidates but couldn’t finalize a hire due to a slight mismatch in expectations. The bar is high, and the pay is low—but we’re looking for the next Warren Buffett. If you know someone obsessed with markets, send them our way: EVF@8vantedge.com.
Markets
After two years of double digits returns (>20%) for the S&P500, the herd was expecting another extraordinary year for 2025.
How to blame, it is all about AI hype.
Little concern the Mag7 rally is one of the most extreme in recent history (60 years).
To be fair, you got a strong set of business there (Tesla aside…)
(By the way on Tesla, the trade of the year so far: Short Tesla, Long BYD.)
Other than Elon’s carmaker, the biz are nicely growing top line 20-30% for the hyperscalers.
But valuations matters, it’s only a matter of time.
And when you break through the 200-day moving average, things get hairy.
The title of this chart is a bit extreme… But things happen first slowly, then suddenly.
One of the best performing market? Poland at almost +40% YTD (Disclaimer: we own equities there, in Greece and Netherlands), while the US negative!
Investors are quick to react after the fact.
Out of the US, into Europe!
Europe got a boost by JD Vance in February.
On a side note, the USA has lost its exceptionalism quickly.
But Europe has a looooong way to make up for 20y of underperformance. Look at the timeline!
But hey, corrections are part of the game.
Keep in mind we are still at about 20 Price to Earnings, and to get to 11.7 would be a halving from current levels!
And while you worry about the noise, Amazon is trading cheaper than both Costco and Walmart.
Commodity-land
You can’t talk about commodities, without mentioning the elephant in the room.
The gap is widening between Gov spending and Tax revenue: DOGE anyone?
Another extreme title, but you get the picture
While gold and copper move to all time high in lockstep since USA elections..
The trading idea here is copper miners…
And gold miners.
Also because diesel is a key input in mining, and the EIA is forecasting lower brent price.
But wait a minute, are we aflush in oil?
Maybe something is brewing
Bonus charts
If you’re hiding in private markets, let me break to you the bad news: returns are negative.
This chart is for Venture Capital, but our very first hand anecdotical evidence of deals made in Europe recently by leading Private Equity firms are scary.
It will likely be a disaster, and if you invested you can’t get out, I am sorry.
Looking at the bond market, is Ukraine winning?
Paying 3% to borrow to rebuild the energy system and the defense industry is not that bad after all, we’re talking trillions here…
The hope here is that they won’t fire up all of them, but they are building energy redundancy (= energy security).
Clean investments are faring poorly. Doing good while losing money, unfortunately.
A longer CotM this issue as the previous issue was shorter.
Thanks for reading this far, we hope you enjoyed it!
Any comments? Feel free to send them in!
The Enhanced Value Fund (EVF) Team
Disclaimer
This document is for informational purposes only and shall not be construed as an offer or solicitation to subscribe in the fund or any products referred herewith.
This document does not constitute investment advice or counsel or solicitation for investment in any fund or security. Any offer or solicitation will be made only upon execution of a completed Private Placement Memorandum, subscription agreement and relevant documentation, all of which must be read in their entirety. No offer to subscribe in shares will be made or accepted prior to receipt by the offeree of these documents and the completion of all appropriate documentation.
Any projections or forward looking statements are not necessarily indicative of future or likely performance. The information provided here has been obtained from or is based upon sources which are believed to be reliable but is not guaranteed as to its accuracy or completeness. Any persons acting upon this information do so entirely at their own risk. The information shown may contain technical inaccuracies or typographical errors. All information contained herein is subject to change without notice.
The author disclaims any and all responsibility for any direct, indirect, special or other consequential loss or damage of any kind arising directly or indirectly from the use of any information contained herein. This information is not intended to be made available to any person in any jurisdiction where doing so would contravene any laws or regulations.
By accessing this document you confirm that you are aware of the laws in your own jurisdiction relating to the provision and sale of securities, financial/investment services and products. You represent that you will not utilize the information contained in this website in a manner that could contravene such laws by ourselves or any other person.