Ro Ro Farm Co.
Investment Partnership
2023 Letter To Partners
“You shouldn't own common stocks if a 50 per cent decrease in their value in a short period of time would cause you acute distress.” - Warren E. Buffett.
Dear, Partners.
I want to thank all the partners for your loyalty and trust in me. This year has been exceptional. My family is sending you and your family lots of prayers with: blessings, good luck, good physical and mental health, happiness, wealth, spirituality, and serenity.
I encourage everyone to spend quality time with their friends, family, and themselves. I believe that time is more important than money in making money. Time is the most valuable resource we have. Use your time wisely. Use the time you have to create honorable and memorable moments with your friends and family because you don’t have an infinite amount of time. Most of us will leave this world with more wealth than we can spend. However, everything has to be managed and balanced. Just don’t forget that you are alive, and life is beautiful.
Below is the performance summary of Ro Ro Farm Co. For the year 2023, the fund had return of +83.22% with returns being +63.66% for limited partners. We really hit a home run this year. This year we made quite a bit of money from the financial and technology sectors. We are trimming our positions in these sectors and reallocating capital in a different direction. We will continue to have a concentrated portfolio with a slight focus on special situation investing.
Regarding the economy, the increase in interest rates seems to have had a great effect on the economy. While everyone in the markets are expecting the interest rates to decrease, we ‘are not’ expecting interest rates to increase or decrease. We are not in the business of making economic forecasts. Interest rates are going to have a great impact on how we value our investments. Thus, impacting our investment decision in the long term.
In investing, you really have to dig deep to find the facts. There is lots of noise. You really have to screen which information to ignore and which information to base your investment decision on. If you put 100 red ants and 100 black ants in jar and close the jar, then nothing will happen. The red and black ants will live in harmony. However, if you shake the jar, the ants will go into war. The red ants will try to kill the black ants and vice-versa. The question the ants should be asking is who shook the jar and why. Most money managers act like red and black ants in a shaken jar.
In the wild, bees go out to find nectar. Once they find the nectar they come back to the hive and do a dance to communicate with other bees about the nectar. However, if you put the nectar straight up to the beehive, the bees will do an incoherent dance until they die. Bees does not have the genetical coding to communicate the situation because there is no nectar straight up by the beehive. We humans also must be careful if our brains can and cannot process some information. We have to be careful when we are doing the bee equivalent of the incoherent dance.
It’s very important to have an open mind. Laws, facts and situations change with time. Thus, it’s important that you don’t want to be a big believer of anything.
We monitor the economy very closely. Micro and macro-economic data is very helpful in making individual investment decisions. Again, we are not macro investors. We are value investors. We believe that the market and economy are 'less’ correlated in the short run and ‘more’ correlated in the long run. We believe that currently, anything could happen in the short run. It's instructive art. That is how the world works. Thus, we are trying to prepare for any outcome that is to come, whether it is positive or negative.
In the long run, we should do well. We are not in the game of gambling, speculation, or forecasting. We will stay grounded and follow our value investing philosophy. Thus, staying within our circle of competence and investing in undervalued income producing assets that we can value. We will continue to keep a concentrated undervalued portfolio.
It is very important for my partners to understand that you have to be okay with your investment balance decreasing by more than 50%. If you emotionally can’t handle your investment decreasing by more than 50% then investing is not for you. If you have been investing with me for some time, then you have experienced great volatility. Expect, great volatility in the future when you invest with me.
I expect to close the fund to outside investors starting December 2025. We will see how things play out when the time comes. Meaning, current partners can make addition and withdrawal to investment, however, we won’t accept capital from new partners.
I do not like asking investors and partners for money. It's not in my nature. It is very uncomfortable for me to raise capital. If you know anyone whose values align with our values. Then, I would be happy to connect with them to see if our partnership is right for them to invest in. Plus, I give my appreciation and gratitude in advance.
For fun, I am starting an account called CFID (Change Found Invested & Donated) Fund. Basically, whenever I find coins (money in the streets) I will collect it, invest it, and compound it. The fund will compound, untouched until the year 2050. At the end of the year (2050), the fund will be donated to nonprofits that make the world a better place. I will keep everyone updated on a yearly basis. We will start with a dime ($0.10) to invest in 2024.
We are hosting an annual dinner meeting in Little Tibet Restaurant on January 4th (6PM). This will be an opportunity to answer any questions that you have in person. Please let me know if you will attend or not, thus we can carefully plan.
I will also be moving my office to Downtown Boulder. The price is better. Plus, I am looking for a smaller and quiet office to increase my focus. I will send you the address and location information once the lease goes through.
I will also be sending out tax forms to you to give to your accountant around February – March of 2024.
If you have any questions about the markets, economy, funds, world, anything at all then let me know. I will be happy to answer it.
Lastly, I would like to remind everyone that: 1) past performance doesn’t guarantee future performance. 2) Investment may lose value. 3) Investments are not FDIC insured.
Happy New Year!
December 30, 2023 Cordially,
Rojan Shrestha
Ro Ro Farm Co.
