Cove Street Capital

While the beach version of SoCal has had an epic, non-marine layer summer, it seems to have been enjoyed by few locals who instead violate the cardinal rule of adult life without children living at home and nevertheless travel to Europe in summer. We haven’t missed you.

Here we are in June. Things are mostly continuing in a Newtonian fashion: “A stock at rest will remain at rest, and a stock in motion will remain in motion, seemingly at constant velocity and in a straight line, unless acted upon by a net force.” Or Elon swiping your Nvidia chips.

2024 got started in a similar fashion to which 2023 ended: eyes were tightly focused on the proverbial briefcase of Federal Reserve Chair Jay Powell as to interest rate policy…and the conclusion for now is that interest rate cuts in 2024 remain largely on the table.

We see the usual mess and risks in the world as you do, but we also are seeing more than enough interesting things in which to invest capital.

The calendar third quarter of 2023 was a messy one for financial markets at large, and we were not immune to its lack of charms. Nonetheless, it’s been a pretty good year for our small-cap strategy.

The world turns. New people are born and eventually move off the couch and into something resembling employment. And thus new generations of nonsense about “solved” topics are produced.

There is a whole world going on beyond the 8 largest stocks, which some people can’t see without a microscope or frankly have no inclination to bother stepping into the lab.

“Desengaño” was noted by one Antonio Garcia Martinez in his most excellent book, Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley, as a unique style of Spanish genre painting.

As we have noted in this space in the past, there is a lot of the world that cannot be captured by the most elegant and detailed of spreadsheets.

As we have noted in this space in the past, there is a lot of the world that cannot be captured by the most elegant and detailed of spreadsheets.

Every year has plenty of lessons when looking backward in December.

When your largest position, Viasat Inc. (Ticker: VSAT), enters into a transformational merger involving regulatory complexity, interesting technology, enough equity issuance to require a shareholder vote, and a conceptual doubling down against what might be called the “Elon Musk-generated low-earth-orbit satellites (LEO) space craze...

Be forewarned – we are going to empty the quote bin this quarter.

Well, let’s just say things are different in 2021.

As we have noted previously, one cannot practically ignore the celebration regarding our annual lap around the sun, although I think it’s fair to say that there are roughly 7.5 billion people outside of Silicon Valley—or those who run large cap growth/tech funds—that are delighted to see 2020 declared over.