Patient Capital Management is a Baltimore asset manager founded in 2020 by Samantha McLemore, CFA — Bill Miller's long-time co-manager (working together since 2002, running the flagship Opportunity Equity strategy since 2014). Continuing the Miller-school contrarian tradition, it practices "time arbitrage": exploiting behavioral mispricing to concentrate in controversial growth names (tech, healthcare, Bitcoin-related) at deep discounts to intrinsic value. Its site preserves Bill Miller's complete 1995-2022 market letters, alongside ongoing quarterly letters and webinars.
This report looks at how markets performed in early 2021. Despite bad news like the Capitol riot and COVID-19 lockdowns, stocks went up—but not the usual tech giants. Instead, old-economy sectors like energy (up 30%) and finance, plus small-company stocks, led the rally. Bonds fell because investors expected higher inflation and interest rates. For regular investors, this suggests a shift: the strategy of just buying big tech may no longer work as well. It's worth paying attention to industries that benefit from economic reopening. Bitcoin doubled in the quarter, but it's very volatile and risky.
This report discusses global market performance in the first quarter of 2021, noting that markets continued to rise despite negative news such as the ongoing pandemic, renewed lockdowns, and the U.S. Capitol riot. The core view is that value stocks and small-cap stocks outperformed growth stocks and
This chapter reviews global market performance in the first quarter of 2021. Despite persistent negative developments such as recurring pandemic waves, renewed lockdowns, and the U.S. Capitol riot, the market continued its upward trend. The report focuses on the divergence in performance across asset classes, particularly the strong leadership of value stocks and small-cap stocks.
The author's key judgment is that a clear style shift has occurred, with value stocks and small-cap stocks systematically outperforming growth stocks and large-cap stocks. Counterintuitively, despite frequent negative events (the Capitol riot, Texas winter storm, Suez Canal blockage), the market chose to bet on sectors benefiting from economic recovery (energy, financials, industrials) rather than defensive or growth assets.
| Asset Class | 2021 Q1 Return |
|---|---|
| Dow Jones Industrial Average | +8.29% |
| S&P 500 | +6.17% |
| Nasdaq Composite Index | +2.96% |
| Russell 2000 (Small-Cap) | +12.69% |
| Russell 1000 Value | +11.24% |
| Russell 1000 Growth | +0.94% |
| Energy Sector | +30.84% |
| Financials Sector | +15.90% |
| Industrials Sector | +11.41% |
| Long-Term U.S. Treasuries | -13.9% |
| Bitcoin | +103% |
| Crude Oil | +21.93% |
| Gold | +7.17% |