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2016 was a very good year for us. It could have and should have been a lot better, but we will gladly take a 44% return without complaining.
Generally we like to execute very few trades within any given year. We tend to position ourselves carefully, in high prospect stocks and then wait out minor turbulence, waiting for the highest returns over an extended time period. This past year was no different, however, it was a year of positioning, rather than waiting. We moved out of some long term holdings, realizing some sizable gains, and took large positions in 2 new companies. We feel that both these companies show a strong probability of outsizes gains. They have very strong management teams and good track records, however they have recently come under pressure due to “black swan” events. We have already seen strong returns from one of these companies in 2016, as their turnaround progresses. The other company might take a bit longer to show results, but we are confident that it will show good returns in 2017 and going forward.
Overall, in 2016, our fund experienced very strong results within the first 6 months of over 44%. By the end of September 2016 the fund was up over 80%. These gains were reduced in October and December caused by a fall in share price of our top holding. Although the holding ended the year well off its highs, it was still up almost 50% since we purchased it. We feel that in 2017 this holding has a strong chance of increasing further. It remains and will continue to remain our core holding in 2017 and we will add to our position if it should fall more.
Rizzi Capital is a small fund, but it continues to be one of the best performing funds in Canada and among the top in North America. It has offered consistent, positive returns over the last 8 years, and has beaten all North American markets significantly. We feel that an increase in our capital base would help us continue to outperform and perhaps even increase our returns. We will consider all opportunities to work with new individual and institutional investors in 2017.
Continued prosperity,
Mario Rizzi