David Rolfe's Wedgewood Partners 4th Quarter Client Letter

Welcome to the Hotel California. Such a lovely place. Such a lovely face. They livin’ it up at the Hotel California. What a nice surprise, bring your alibis.

Mirrors on the ceiling, the pink champagne on ice and she said, “we are all just prisoners here, of our own device.”’ And in the master’s chambers, they gathered for the feast, they stab it with their steely knives, but they just can’t kill the beast.

Last thing I remember, I was running for the door I had to find the passage back to the place I was before, “relax” said the night man, we are programmed to receive.

“You can check out any time you like, but you can never leave!”

Review and Outlook

Our Composite (net-of-fees)i fell -15.17% during the fourth quarter of 2018. The benchmark Russell 1000 Growth Index fell -15.89%. The S&P 500 Index fell -13.52% during the quarter.

Top fourth quarter performance detractors include Apple, Facebook, Qualcomm, Visa, and Celgene. Top fourth quarter performance contributors include Alphabet, PayPal, Core Laboratories, Fastenal, and Ulta Beauty.

During the quarter we sold Core Labs and Schlumberger. We increased Fastenal, Bookings Holdings, Facebook, Charles Schwab, and Ulta Beauty.

Our Composite (net-of-fees) fell -4.01% during 2018. The benchmark Russell 1000 Growth Index fell -1.51%. The S&P 500 Index fell -4.38% during 2018.

Top 2018 performance detractors include Celgene, Facebook, Schlumberger, Kraft Heinz and Charles Schwab. Top 2018 performance contributors include Edwards Lifesciences, Visa, Tractor Supply, PayPal, and Ross Stores.

Company Commentaries

Apple

Apple (NASDAQ:AAPL) was a leading detractor during the fourth quarter. On the fundamental front, in their most recent earnings report, the Company’s reported +20% sales growth, driven by a +30% increase in iPhone revenue and a +20% increase in software and services revenue. Despite this torrid growth, the stock

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