“At 91 and 98, Warren and Charlie remain two of the world’s great purveyors of common sense, rational thought, and investment wisdom.” -AP

BOCA RATON, Fla.–(BUSINESS WIRE)–Bluegreen Vacations Holding Corporation (NYSE: BVH) (OTCQX: BVHBB) (the “Company” or “Bluegreen Vacations”) announced today that it has entered into a definitive agreement to be acquired by Hilton Grand Vacations Inc. (NYSE: HGV) (“HGV”) for $75.00 per share in an all cash transaction, representing a total enterprise value of approximately $1.5 billion, inclusive of net debt. See Full Article: (https://www.businesswire.com/news/home/20231106410750/en/Bluegreen-Vacations-Holding-Corporation-to-be-Acquired-by-Hilton-Grand-Vacations).

Certainly, Seabird credits much of our clients’ outperformance to their willingness to hold slightly concentrated portfolios. But have we been just unwittingly taking on risk? The volatility data below would be at least a couple of significant data points defying that conclusion: VolatilitySeabird:                  4.62%S&P Muni Index:  4.92% Maybe even more pertinent is our clients’ Upside/Downside capture: Seabird Upside Capture:             92.7%Seabird Downside Capture:         8.4%*Relative to S&P Municipal Bond Index benchmark But are we just fooling ourselves with data to draw a desired conclusion? Have we slipped into the hole of confirmation bias? Or is there a logical reason why concentration could reduce volatility? Might there be other portfolio characteristics acting to reduce risk and volatility? We have identified 4 clear reasons our portfolios of 15-25 names behave unusually well: We conclude that the willingness to defy an institutional norm – concentration – creates a sense of urgency with each investment decision that is largely absent in diversified portfolios. That urgency combined with clients’ willingness to adopt a style box defined by common sense – rather than institutional mandates – allows us to enjoy latitude which others don’t have; the latitude to avoid risk when and where we see it. -AP

“Puerto Rico continues to outperform public perception. Of particular note is the strength in sales tax collections which are pledged against newly issued bonds.” -AP

In addition to our quarterly memos, we hope that you will find Insights a useful resource to stay informed about any news pertinent to our investment process, as well as general insights into markets and investing – basically all that makes us tick. Enjoy!