Monday, April 26, 2010

Chanticleer Investors Q1 2010 Letter

The first quarter of 2010 was another period during which it might appear as though little fund activity took place. There were a few small changes to the portfolio, but, as you will see, we continue to hold a significant amount of cash. You might wonder what we actually spend our time doing if we’re not spending all that loot. As usual, our time is given to looking at a great number of ideas. The problem, however, is that a great number of ideas and a number of great ideas are not one and the same. The continued advance in the overall market, our somewhat skeptical outlook on the strength and durability of the budding recovery, and our view on the continued abundance of macro risks (noted below) have all combined to create an environment in which we are finding fewer ideas where the price-to-value ratio gets us excited. In such a scenario, we will continue to hold cash and avoid putting cash to work just to “have it in the market.” While we prefer, as we’ve said in the past, to own mispriced businesses, we also prefer not to lose money. Such a mindset may mean that we underperform the market for a period of time, but we are willing to face this possibility and we hope our investors are too.

Attention Hedge Fund Managers: If your letter appears on MIN and you'd like it removed, or you'd like your letter posted on MIN please send me an email.

Chanticleer's Q4 2009 Letter
Chanticleer's Q3 2009 Letter
Chanticleer's Q2 2009 Letter
Chanticleer's 2008 Year End Letter