Monthly Letter October 2015

The equity markets have had a couple of months of very poor sen ment due to growth worries in general and more speci c worries about China. In October, equi es rebounded sharply in what almost looked like a rerun of the end of October in 2014. The year so far has given both the bears and the bulls something to support their views. The bears point to Chinese weakness and the re- sul ng collapse in commodity prices. The bulls argue that growth is slowly ge ng there and that the rest of the world is performing ok. We have previously argued our case for being long Europe over the US and the 3rd quarter earnings season is quite suppor ve to this posi on. The year on year gures for the Eurozone stocks looked moderately posi ve. Top line was +4% ex energy with EPS +9% ex energy. For the US the corresponding gures ex energy are +1% top line and +2% EPS. A li le bit of an upside down world when we rely on Europe for growth.

Madrague performed well in October, +3.04%. This brings the year to date performance to +6.24%. Sectors of note in October:

Technology: The sector accounted for roughly half of our net performance in October. Our long posi ons in Fingerprint Cards, Cypress, Logitech, Nokia and SAP performed well. All posi ons were kept in the por olio at the end of the month. Fingerprint was exited in the rst few days of Novem- ber as we believe the stock has reached the high end of the valua on range. SAP was also exited in the beginning of November. In Cypress we increased our posi on in October. We believe that the underperformance in 2015 has not been warranted and that the posi ve synergies from the merger with Spansion are not captured by the market.

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