The Grinch Who Stole Our Returns

Chris Lahiji  |

I know most of us are gearing up for the holidays or have already celebrated with loved ones: Hanukkah, Yule, Festivus, Boxing Day, Kwanzaa, and Christmas.

As of now, I have done 0% of my holiday shopping. It will be a mad dash tomorrow as I shop all my favorite high-end stores: 99 Cent Only, Hermes, Big Lots, Ferragamo, Kohl's (hope they still have that magical 80% off rack), and my personal favorite, Costco  (COST).

Costco will be the one where I spend the most time. Who doesn't want 10 pounds of chocolate-covered biscotti, a Kirkland belt, or 300 fruit snacks for the kiddos?

But let's not get too festive. It is time to address the elephant in the room. The markets. The correction. The fact that the only shopping I'll be doing at Hermes and Ferragamo this year is through the window.

It was not long ago (mid-August) that my personal accounts were flush with green arrows, ample cash in the till (reserved for future bad investments), the tax situation looked good, and the LD Micro index was hitting all time highs. Of course, I jinxed it by mentioning that we were quickly approaching LD 3000, that interest was back in micro-caps. volume, dollar amounts, deals, all looking healthy. The catalyst was the smallest names in the public world had wrongly been overlooked for nearly a decade, and we were quickly playing catch up.

Let's fast forward to today.

The LD Micro Index is down 30.68% YTD. The Russell is only down 16.78%

For all those asking what the point of creating the index was, just read the last sentence again. Repeat if necessary.

In the past month, we have become minor celebrities in the investment world, as portfolio managers want to finally use us as a benchmark given the index's poor showing this year.

I do not them blame any of them a single bit. For all the managers who are down more than 16.78% that want to use the LD Micro index as a comp because it makes you look good, then I'm all for it.

Years ago, my college buddies would invite me to go out with them, not because of my "charm" and mediocre looks, but because I was so bad with women that it enhanced everyone else in the group!

Even as time advances, we are still making "assists." This time it's the guys who were up 5,10,15,20, 30%+ heading into Q4. Now they are down 15,20, 25, 30, 50% for year.

This is not a joke.

We take this stuff seriously, and everyone's livelihoods are at stake.

Investors (ourselves included) have been crushed.

I am down for the year now after having three sublime quarters of companies ripping higher, and names getting taken out. It is not funny when I see red across the board.

Our largest investment is down 60% in the past two months.

We get tight. We invest less. Our cynicism grows. Friends find us more prickly at holiday parties. It sucks.

The "true" remaining investors have some difficult decisions to make. You have a lot of companies that have wrongfully sold off, even when things are going very well internally.

Opportunity exists, but not when the markets are going down 2% a day for what feels like several months now.

We are keeping tabs on a lot of things right now, and shall keep our community posted.

Let's try to end the year on a good note.

Given the fact that so many people read this publication every week, I am naturally tight when it comes to details about my life. After being on CNN and Fox News frequently for the early part of my career, I met a lot of famous people and had the pleasure of spending time with them. The consensus was often clear. No commodity is as valuable as privacy.

But for once, I'll tell everyone what I do around this time of year. I give gifts to all the exemplary people who help us year round that do not get the recognition they deserve.

Whether it be the bagger at the supermarket, person who vacuums the cars at the rental car terminal, servers at restaurants we frequent, the guy that warmly greets you everyday at the security gate, the one remaining person who still has their soul at the post office, or the cool TSA agent that knows you on a first name basis (in a good way of course).

Nothing brings me greater happiness that adding a little light in someone's life. Nothing brings me greater joy than recognizing excellence in a world that is desperately needing some right now. Very few people take pride in what they do anymore. It shows in their demeanor, their work, and their physical presence for those of us who are still cognizant.

A lot of patrons that read this have the ability of doing great things with small gestures.

Everyone must also be mindful that a lot of people in their local communities have had unfortunate circumstances happen to them in their lives. Whether it be someone losing their job, a prolonged illness or a recent death in the family, or simply a lack of resources. Help, just like excellence, comes in a lot of varieties. Don't ever underestimate the power that each one of you holds.

Play your best.

Merry Christmas. Happy holidays.


Chris Lahiji
LD Micro

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DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:

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Symbol Name Price Change % Volume
COST Costco Wholesale Corporation 322.05 0.00 0.00 14,487 Trade



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