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Preview: 2020 Year-End Letter

A snippet from our 2020 Year-End Letter. Download the full letter here.


Dear friends and valued investors,

The historian Eugen Weber wrote a book called The Hollow Years about France in the 1930s. I’m tempted to write one called The Hollow Year about America in 2020. Alas it seems we are learning the hollowness did not end with the old year. We are living in interesting times. The mistake is to assume our times are, at various points and with various happenings, so much better or worse than the past. The truth is the hollowness Weber writes about is never fully resolved. It only changes form from one generation to the next. That’s the funny thing about human nature—people tend to miss when something new is nothing more than something old repackaged.

With all the difficulties of 2020 (and the start to 2021)—the sadness, confusion, frustrations, and isolation—let us not forget that virtually all westerners still live better than the kings of yesteryear. I like to ask people who are complaining about [this or that] present day issue which previous period they’d like to go back to?[1] Once in a while they’ll point to an intriguing time, but never do they sincerely admit they’d like to go there permanently. I learned from my friend Firas Cheaib (who speaks and reads in more languages than I knew existed) that the earliest notable literature we’ve found—The Epic of Gilgamesh written circa 1800 BCE in Mesopotamia[i]—begins with a longing for times past: “In those days, in those distant days, in those nights, in those remote nights, in those years, in those distant years...” The tendency to reminisce about ‘the good ole days’ is as ancient as it gets.


CTG Fluxion returned +35.07 percent net for the year versus a total return of +18.40 percent for the S&P 500, +16.33 percent for the MSCI All-World Index, and +14.83 percent for a hypothetical 70/30 portfolio.[2] Just under two-thirds of CTG’s net return came from equity holdings (roughly 23 percent), with the rest attributable to hedging. The core holdings that made up the vast majority of our investment portfolio at year end included GoDaddy, Dropbox, CyberArk, Facebook, AbbVie, Amazon, Verizon, CVS, Comcast, Loral Space & Communications, Biglari Holdings, Vera Bradley, Micron, and Icahn Enterprises.

The top five contributors for the year: Etsy,[3] Amazon, CyberArk, Facebook, and GoDaddy. The top five detractors, which I largely exited before mid-March: Fiat, Ulta Beauty, Magna International, Delta Airlines, and Southwest Airlines. Even with the sales in late February and early March, our investment portfolio turnover was less 33 percent. In hindsight, I probably should’ve held on to Ulta and Magna. Both are wonderful companies that I’d spent a good amount of time assessing. But having no idea when retail and auto manufacturing spending would come back, it wasn’t worth the risk at the time. No one could’ve foreseen how rapidly and definitively markets would avoid despondence and plunge back into enthusiastic, if not frequently indiscriminate, fervor.


Footnotes & References

[1]Today’s U.S. citizen has more comforts than any nobleman of just a century or two back. I’ve previously written that this does not mean we are better at most things than our ancestors. Modern thinkers overestimate themselves in this regard. [2] See our factsheet for additional information on performance and benchmark calculations. [3] Exited later in the year. [i]

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Letters & Notes

General Introduction to CTG Factsheet Investor Letters 2020 Investor Letter III (Year-End) 2020 Investor Letter II (Summer) 2020 Investor Letter I (Spring) 2019 Investor Letter III (Year-End) 2019 Inv


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