Q4 2024 LP Letter
Dear Partner,
Our relative outperformance narrowed toward year-end as post-election market optimism lifted asset prices following Donald Trump’s victory and Republican congressional gains. The fund gained 2.5% in Q4, contributing to a 27.01% net return in 2024—outperforming the NASDAQ (QQQ: +25.97%) by 4% and the S&P 500 (SPY: +24.13%) by nearly 12%. These results underscore the strength of our long-term strategy.
Demand for AI computing hardware appears constrained only by operating costs and political concerns about rising electricity prices. We believe the market undervalues NVIDIA’s long-term potential, with sustained demand for AI training hardware exceeding expectations. We also expect demand for NVIDIA’s automotive and robotics products to grow sooner than anticipated.
We doubled our position in Broadcom (to 5%), a leader in custom chips for mature AI models, ahead of its December earnings-driven surge. Similarly, our significant investment in Crowdstrike after the summer outage fiasco has already delivered returns exceeding 36%. These investments highlight the importance of being invested and ready to act decisively when opportunities arise.
Overall, the portfolio delivered strong performance, though uncertainty raised by RFK Jr.’s nomination as Secretary of Health and Human Services (HHS) negatively affected our healthcare holdings. The nomination introduces uncertainty for food, agriculture, and pharmaceutical companies but also presents investment opportunities. It is unclear how much his past rhetoric will shape his agenda or whether he can drive meaningful change within key HHS departments like the FDA. Moreover, Congress has tools to limit his impact—tools they may use, given his controversial appointment and the considerable political power of these industries’ collective influence. If enacted, RFK Jr.’s views on vaccines and medical treatment could lead to outbreaks of diseases not seen for generations. I expect such policies will self-correct as herd immunity collapses and preventable tragedies gain widespread attention.
This uncertainty and volatility in healthcare, while challenging, may also create exceptional opportunities for investors prepared to act decisively. Rapidly shifting valuations driven by policy decisions and market reactions could open windows for significant gains, particularly as public and regulatory responses stabilize over time. While healthcare promises compelling opportunities, our investments in information technology, including AI, remain a key driver of the fund’s performance. We continue to identify compelling opportunities in technology and AI that we believe will deliver durable outperformance for years to come.
-Nicholas Carpenter
Manager, NJC Capital Management LLC
https://www.njchorizon.com/