Polen Capital Management Llc released its "Polen Focus Growth Strategy" Q4 2025 investor letter. A copy of the letter can be downloaded here. In Q4 2025, the Polen Focus Growth strategy delivered a -1.37% gross return, underperforming the Russell 1000 Growth Index (+1.12%) and the S&P 500 (+2.66%), as concentrated mega‑cap leadership and AI valuation concerns drove market volatility. The fund faced headwinds from market rotation and valuation pressures but remained disciplined in its investment approach, fo ...

Market Trends & Global Economy - Global equities experienced a selloff, influenced by concerns over AI, Federal Reserve rate cut uncertainties, and fiscal packages [1][49] - The MSCI All Country World Index fell almost 3% this week, marking its sharpest weekly drop since April [3] - Procyclical risk assets saw sharp declines [4] - The US dollar is benefiting as a safe haven amid risk-off sentiment [5] - G20 summit marred by diplomatic dispute between South Africa and the U S over participation [1][26][49] - US accounts for only 13% of global trade [33] Asia-Pacific Market Analysis - Asian equities, particularly Chinese equities, could benefit from domestic stimulus [20][21] - A miserable day to end the week in Asia, with another day of declines [7] - Tech-heavy indexes in Asia are taking a beating, down about 35% [8] - Japan's CPI numbers came out at 3%, higher than the BOJ's target of 2%, putting more pressure on the BOJ to hike rates [9][54] - Japan's stimulus package is 27% higher than the predecessor [9] Company Performance & Valuations - S&P valuations are at approximately 216%, pulling back from recent highs of around 23% [6] - SoftBank is down by 105% [8] - Investec's interim profit declined for the first time since 2021 due to a slowdown in its African unit [48][55][56] Cryptocurrency Market - Crypto markets have extended their crash, with Bitcoin trading around $86000 [74] - More than $1 trillion worth of value has been wiped out across the digital asset world [74] - Institutional investors are continuing to accumulate Bitcoin, while retail investors are selling [75][76]

Macro Economic Overview - The government shutdown has led to a significant impact on the economy, with fears of a sobering surprise once jobs data resumes [3][6] - Challenger Grey and Christmas reported over 150,000 job cuts in October, marking an increase of more than 180% from September and about 175% from October 2024 [3][4] - Year-to-date job cuts have reached 1.1 million, already 44% higher than the total for all of 2024 [4] Job Market Trends - The job cuts are attributed to a correction from the pandemic hiring boom, structural changes due to AI adoption, and cyclical softening in consumer and corporate spending [5] - The ongoing government shutdown is exacerbating economic concerns, affecting consumer spending, particularly in programs like SNAP [7][8] AI Sector Earnings and Market Sentiment - Recent earnings reports from AI companies show signs of investor sentiment weakening, with Palantir's stock dropping 8% despite beating expectations [11][12] - Concerns about valuation are prevalent, as stocks like AMD and Nvidia also experienced declines after reporting better-than-expected earnings [13][15] - Investors are increasingly cautious, seeking strong execution from AI companies to justify high valuations [14][18] Valuation Concerns in Tech Stocks - The market is witnessing a "show me" situation where investors demand tangible results from AI spending amid a murky economic outlook [20] - Companies like Uber and DoorDash have faced stock price declines due to cautious guidance and significant spending plans for the future [19][20] Bitcoin's Volatility and Speculative Investments - Bitcoin has dropped below $100,000 for the first time since May, down about 20% from its high, reflecting a shift in speculative sentiment [21][22] - Bitcoin's performance is seen as a proxy for speculative investment trends, often the first asset to be trimmed when investors seek safety [22] Upcoming Earnings and Economic Indicators - Upcoming earnings to watch include CoreWeave, Disney, Alibaba, and Tyson Foods, which may provide insights into consumer behavior and economic conditions [23][24][25]

Core Insights - The start of the earnings season is crucial, with indications of strong loan growth and confidence among households to borrow, suggesting a healthy economic environment [1] - Bankruptcies are normalizing from multi-decade lows due to COVID-19, and the current levels appear stable, indicating a recovery rather than a crisis [2] - Concerns about credit events are overshadowing fears of an equity bubble, with elevated valuations in certain sectors like AI and gold being noted [3] Economic Indicators - The U.S. economic growth is under scrutiny due to various concerns including tariffs, inflation, and political issues, which are creating a volatile trading environment [4] - Regional banks are reporting better-than-expected loan loss provisions, which may signal a turnaround in the sector [5] - A significant market cap loss of $1 billion was triggered by a relatively small $50 million breakdown, highlighting the sensitivity of the market to isolated events [6]

Core Insights - Coherent Corp. (NYSE: COHR) has experienced a notable decline of 21% in its stock price despite reporting another quarter of double-beat results [1] - The stock is currently priced at $90, reflecting a 17% increase since the initial coverage a year ago and a 2% increase since February [1] Financial Performance - The company has consistently delivered strong financial results, indicated by the term "double-beat quarter," which suggests that it has exceeded both revenue and earnings expectations [1] Market Position - The current stock price movement indicates a disconnect between the company's strong performance and market perception, highlighting potential investment opportunities or market inefficiencies [1]