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Fourth Quarter 2014 Investors Letter

“The techniques I developed for studying turbulence, like weather, also apply to the stock market.”

Benoit Mandelbrot


Mandelbrot was a brilliant mathematicians that challenged the notion of efficient markets since its inception and spent considerable effort researching models that might capture financial markets’ volatility in a more complete way than static theories.

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Third Quarter 2014 Investors Letter

“Neither a borrower nor a lender be.”

William Shakespeare


It would seem from the above quote that Mr. Shakespeare did not believe in leveraged markets and probably he would never have put a credit derivative in his pension account. Certainly, financial markets have changed greatly from the times of McBeth and the Merchant of Venice and in spite of recurrent crises, our capital markets are more efficient and more functional for a better society.

However, the dangers of being a borrower or a lender have not changed much and still depend on one’s ability to understand risk in order to properly manage it.

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Second Quarter 2014 Investors Letter

“We don't see things as they are, we see things as we are.”

Anais Nin


If Anais Nin is correct, investors must feel pretty good and thinking they will continue to feel this way going forward. Since our last quarterly missive, risky assets in general have increased their upward momentum and valuations have decayed within a context of historically low volatility.

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First Quarter 2014 Investors Letter

“He who knows when he can fight and when he cannot, will be victorious.”

The Art of War, Sun Tzu

As expected and discussed in our previous Quarterly Letter, the first three months of 2014 were volatile and eventful.  Equity markets around the world struggled to find direction, new Fed Charwoman Janet Yellen was possibly misunderstood by financial markets after her first press conference and Mr. Putin decided to take advantage of Ukrainian instability and annexed Crimea among global outcry.

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