Old West Investment Management 1Q19 Letter: Long These Commodities

Old West Investment Management letter to investors for the first quarter ended March 31, 2019.

Q1 hedge fund letters, conference, scoops etc

This article first appeared on Hidden Value Stocks

Dear Investor,

Now that the stock market bull run has celebrated its ten-year anniversary, I must admit I often wonder how and when it will end. We got a glimpse of how it would feel when the market fell just shy of 20% in December. I wasn’t terribly surprised by the December swoon, as I have been concerned about many red lights flashing over the past couple of years. What has surprised me though, is the strength of the snapback rally in this first quarter of 2019. Not only has the market recovered, but there is a bit of euphoria not seen since previous market tops. On the last day of March, ridesharing company Lyft went public. Lyft’s $911 million loss last year is more than that of any U.S. startup that has ever gone public. Lyft shares were up 8.7% on their first day of trading to much fanfare. Soon to go public is WeWork Inc, America’s new-age office leasing company. WeWork’s 2018 net loss of $1.93 billion (double the previous year) exceeded their revenue of $1.82 billion. Read this again to be sure you got it right. By contrast, Facebook, Google and Apple were all profitable years before they went public. I smell a whiff of market euphoria. As you can see in your enclosed statement, we had a strong first quarter and April is off to a great start for us.