Last year was a lot of fun for stock investors and our equity portfolios enjoyed the ride, performing exceptionally well on an absolute basis and even better on a risk-adjusted basis. The Broyhill High Quality Portfolio posted a 27.1% gain for the year while maintaining a cash reserve that averaged roughly one third of the portfolio throughout the rally.
Please click on the image below for our annual letter, I'm A Little Crackpot. In addition to an overview of the current market landscape, we discuss the potential catalysts for greater volatility in risk assets and weigh in on the consensus flight from safety. We also discuss our return expectations for stocks and bonds, while providing some perspective on positioning fixed income portfolios today.
The balance of the letter reviews the current opportunity set and a few of our highest conviction investment themes, which include: new positions poised to benefit from reduced commodity costs and an emerging middle class; bottlenecks in energy infrastructure which are nourishing profitability at strategically located refiners; and structurally advantaged businesses with demographic tailwinds, suffering from temporary cyclical pressures.