30 Jan 2023 VG1 investor letter – Year to December 2022
“Every recession brings out the sceptics who doubt that we will ever come out of it, and who predict that we will soon fall into a depression, when new cars will sit unsold in the showrooms forever and houses will stand empty, and the country will go bankrupt.”
– PETER LYNCH
For the twelve months ended 31 December 2022 (CY22), VGI Partners Global Investments Limited (ASX:VG1) generated a net return of -22.3%.¹ Global equity markets experienced a challenging year in 2022, the S&P 500 declining -19% over the period, the NASDAQ Composite retreating -33% and the broader MSCI World Index falling -19%. Few asset classes delivered a positive return for the year, as heightened inflationary pressures, rising global interest rates and a horrific conflict on the European continent saw over US$25 trillion in value erased from global equity markets over the course of the calendar year.
In this letter, we provide an update on the current positioning of the VG1 portfolio, a summary of recent changes and an overview of where we see opportunities to generate attractive returns on our capital over the 2023 year ahead. Additionally, we feel it important to reflect on a number of the missteps made during 2022, and the important lessons we have taken away from this in order to improve our processes over the years ahead.
¹ Past performance is not a reliable indicator of future performance.