Year-End 2024 – Sequoia Fund Letter

Citations · 6

• “The market has never been – not at the peak of dot-com bubble, not during the heyday of the Nifty Fifty, not even in the final days of the Roaring Twenties – this concentrated.”

  p#1 · confidence 98%

• “a mere seven stocks accounted for nearly two thirds of the S&P 500's return in 2023 and half of its return in 2024. The "Magnificent Seven" now comprises over a third of the Index.”

  p#1 · confidence 97%

• “we are willing to make this one: in the longest term, it will not compound at over 25%, as it has over the past two years. We will go further: in the longest term, it will not compound at 15%, as it has since June 2016, and which puts it roughly 20% above its 50-year annualized return.”

  p#1 · confidence 97%

• “The shares promptly headed south, and at one point were down as much as 47% from an all-time high reached just months earlier. We took notice. We acquired our shares way off the highs and, more importantly, at what we consider an attractive price.”

  p#1 · confidence 95%

• “Taiwan Semiconductor's share price soared 90% this year, prompting us to trim our position in the fourth quarter. The company's revenues and profits grew on the order of 30% this year, as an industry-wide cyclical soft patch naturally hardened and gave way to a boom in demand among AI-centric datacenters.”

  p#1 · confidence 96%

• “Shares in Rolls Royce surged 86% in US dollar terms in 2024, bringing its impressive two-year cumulative return to over 535%. We expect Rolls' Civil Aerospace segment will have produced an operating profit margin exceeding 16% in 2024, versus the 11.5% margin it reported in 2023.”

  p#1 · confidence 96%