The risk of debt in Brazil

Dear investors,
The European Central Bank decided to start cutting its base interest rate in June this year. The Federal Reserve followed suit and cut US interest rates in September. Meanwhile, the Central Bank of Brazil (BACEN) had already been cutting the SELIC rate since August 2023.…

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30/09/2024

Bets and the stock market

Dear investors, We have been following the case of bets in Brazil, sports betting sites that have become a craze and reached surprising proportions. In August of this year, according to a survey by BACEN, R$21 billion was spent on the…

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02/09/2024

Simplified monetary policy

Dear investors, It is curious how popular the discussion about monetary policy has become in Brazil, a very technical and complex area even for market professionals. What everyone has learned is that high interest rates…

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02/08/2024

The price of ambition

Dear investors, A maxim in the business world is that every company plans to grow. In most cases, the goal is well justified: it brings economies of scale, improves competitive position, makes it easier to attract people…

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01/07/2024

The market makes mistakes

Dear investors, After an optimistic end to 2023, with a strong rise in the IBOV in November and December, the market returned to general discouragement with variable income investments this year. Whenever…

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03/06/2024

Why invest in shares outside Brazil?

Dear investors, Our investment history is almost entirely on the Brazilian stock market. While most Brazilian investors believe that our stock market is not a good investment environment, due to the political and economic turmoil in the…

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06/05/2024

The trap of the 1% per month target

Dear investors, In Brazil, from beginner investors to high net worth families believe that 1% per month is a good profitability target and adopt the strategy of seeking this return with the lowest possible risk.…

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01/04/2024

In Memoriam: Daniel Kahneman

Dear investors, Last week, Daniel Kahneman, a professor of psychology at Princeton and one of the pioneers in research related to behavioral economics, who questioned the premise of classical economists that…

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04/03/2024

Why do we invest in Porto?

Dear investors, The ideal investment opportunity is to find a high-quality company trading at low prices in the market. This type of opportunity almost never appears when the economic scenario is favorable and…

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05/02/2024

Brief history of the monetary system

Dear investors, Money is something so everyday that it may go unnoticed how ingenious its nature is. Current monetary systems are quite complex and, consequently, little understood by the vast majority of people, even among investors.…

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08/01/2024

The limit of predictability

Dear investors, Mark Twain said that history does not repeat itself, but it rhymes. We have been experiencing a cycle of high interest rates in recent years, now coming to an end, which has caused most…

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04/12/2023

In Memoriam: Charlie Munger

Dear investors, Last week, in a matter of minutes, news spread throughout the financial market of the death of Charlie Munger, Warren Buffett's partner at Berkshire Hathaway, who would have turned 100 in a month...

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10/11/2023

Myopic market: why investors focus too much on the short term

Dear investors, There was a time when access to information was a major competitive advantage for investors. In 1815, while England and France were fighting the battle of Waterloo, banker Nathan Rothschild had his own...

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02/10/2023

Brazil one year after the elections

Dear investors, In October last year, we wrote our vision on how the Lula government would act in the new term. The excerpt below shows our expectations at the time: “(…) The biggest risk is that Lula ends up with…

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05/09/2023

Why do we invest in Multi?

Dear investors, Something we like to evaluate are opportunities to invest in “cold elite athletes”: businesses with an excellent track record of financial results, but that are undervalued due to poor results in the recent past, caused by…

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07/08/2023

The turn of the tide in the stock market

Dear investors, In the last 4 months, IBOV has risen around 20%. Therefore, it is natural to question whether there are still good investment opportunities on the stock market or whether the market has already adjusted to something close…

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04/07/2023

A decade of investments

Dear investors, 10 years ago, on June 27, 2013, we formed an investment club called Arcadia, with initial capital of R$ 126 thousand. At the time, the goal was to join efforts to better manage our…

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05/06/2023

Chips: the brain of the digital economy

Dear investors, In April 1965, an article entitled "Cramming More Components Onto Electronic Circuits" appeared in Electronics Magazine. This publication, whose title can be understood in all its magnitude only by engineering enthusiasts,…

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04/05/2023

The Brazilian tax chaos and reform proposals

Dear investors, Much of the political tension related to the new government has revolved around the issue of fiscal responsibility. In short, the new government declared the spending cap law inadequate and presented…

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10/04/2023

Artificial Intelligence: The next technological revolution

Dear investors, The invention of steam engines at the end of the 18th century initiated a period of great advancement in economic productivity that became known as the first industrial revolution. This rapid progress was interpreted to…

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06/03/2023

The Market Pendulum

Dear investors,   In a memo written in 1991 by Howard Marks, the famous fundamentalist investor at the head of Oaktree Capital Management, the movement of a pendulum is used as an analogy to describe the dynamics of…

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03/02/2023

Americanas and SUR: risk or noise?

Dear investors, One of the sayings repeated over and over again by Charlie Munger, the Berkshire Hathaway partner who turned 99 this month, is that “To the man with a hammer, every problem looks like a…

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06/01/2023

The hard side of value investing

Dear investors, We ended 2022 with a return of -12.0% for the year, compared to +4.7% for the IBOV and -15.1% for the SMLL (small caps index). The cumulative return since the inception of the fund about 9…

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02/12/2022

Black clouds on the horizon

Dear investors, In the last month, the IBOV dropped 2%, but the drop was much worse than it appears, as this value is masked by the movement of VALE3, which corresponds to 18% of the index portfolio and…

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31/10/2022

How will Brazil be with Lula?

Dear investors, The dispute between Bolsonaro and Lula left the country extremely polarized, with campaigns characterized by many sensationalist speeches and few government proposals. After the heat of the battle, what now matters to know is:…

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29/09/2022

Elections 2022: Lula or Bolsonaro?

Dear investors, As is customary in presidential elections, almost all public discussions of politics revolve around who will be the next president. Meanwhile, the positions of the National Congress, which largely determine…

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02/09/2022

The age of social proof

Dear investors, It's hard to watch stock market movements without getting intrigued. At one moment, the opinion that the future is bleak prevails, and, soon after, a feeling of optimism infects the markets…

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01/08/2022

David and Goliath in the financial market

Dear investors, Today, the functioning of the financial market in Brazil is still unclear to most individual investors. For example, have you ever wondered how the big brokerages make money even though they offer free services…

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01/07/2022

The Ruin of Bitcoin

Dear investors, Bitcoin reached its peak price in November 2021, around USD 68 thousand. From the peak to the 30th of June, its price dropped around 70%. We always avoid any investment…

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06/06/2022

The threat of inflation

dear investors Inflation has returned to the agenda of economic concerns both in Brazil and abroad. Despite being a subject with which Brazilians are familiar, most people only understand the…

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05/05/2022

What if the stock market continues to fall?

Dear investors, In April, the IBOV fell by 10.1%. Prior to that, the index had risen by 17% from the start of the year to its peak on April 1st. The price of our share in Ártica LT FIA…

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07/04/2022

The flaws of the human mind

Dear investors, Being a good investor does not only require technical knowledge and dedication to analyzing opportunities, but also a certain temperament and psychological control that allow us to remain rational in any scenario we are facing.…

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18/03/2022

The Fog of War

Dear investors, Our last letter talked about the difficulty of predicting the macroeconomic scenario and, a week after it was published, Russia invaded Ukraine. History shows that wars are always unpredictable and full of…

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18/02/2022

How to deal with the macroeconomic scenario?

Dear investors, At the beginning of the year, the market turned its eyes to Brazil's macroeconomy. With the high interest rate and the political uncertainty expected for the year, the themes of the moment are interest rates,…

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06/01/2022

Annual Letter 2021

Dear investors, We ended 2021 with a return of 19.4%, higher than the Ibovespa and the CDI which totaled -11.9% and 4.3% respectively in the period. The accumulated return since the beginning of the Fund, about 8 years ago…

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02/12/2021

Book Suggestions

Dear investors, Continuing our initiative from last year, we reserved our last letter of the year to suggest five books related to the topic of investments. As a criterion, we seek to prioritize books that we like a lot, but maybe not…

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05/11/2021

Is it a good time to invest in the Artica fund?

Dear investors, We are frequently asked by our shareholders: “Is now a good time to make new contributions to the fund?”. Even among us, before this study there was no consensus for this answer, and internally there were those who…

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07/10/2021

Investment case – Marcopolo

dear investors, In this letter, we would like to share our investment thesis in Marcopolo (POMO4), a stock that we bought between 2019 and 2021 and today constitutes a relevant position in our portfolio. It is not so common that managers…

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08/09/2021

small cap investment

Dear investors, Historically, small cap investing has proven to be a consistently profitable way to outperform the market. Small caps are companies with the lowest market value and which, due to their size,…

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09/08/2021

Stocks with insider buys

Dear investors, An analysis that we deem very relevant for investment decision-making is to evaluate the level of purchases made by people who know internally the operation and the numbers of the companies – the…

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17/07/2021

How we achieved a 15.2x return in 8 years

Dear investors, On 06/27, Ártica LT FIA turned 8 years old. Since our inception in 2013, the fund has returned 15.2x equity, equivalent to an annual return of 40.6%…

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10/06/2021

Investment case: Wilson Sons

Dear investors, Wilson Sons is an investment that we have had in our portfolio since the end of 2018 and, currently, it is a very relevant position in the fund. We decided to share it because it is a good example of our…

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11/05/2021

Where does the exchange go?

Dear investors, Since the beginning of the Covid-19 crisis in 2020, the dollar exchange rate has fluctuated between R$ 5.00 and R$ 6.00, close to the historic peak value recorded on May 14, 2020, when…

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26/04/2021

Stocks as an inflation hedge

Dear investors, The concern with a possible return of inflation has grown all over the world. In Brazil it is no different: inflation expectations for 2021 have consistently increased in recent weeks. The latest Focus bulletin…

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03/03/2021

Biggest stock market returns since 2005

Dear investors, Despite the major short-term challenges, the Brazilian stock market is enjoying a period of magnificent returns. Since the beginning of 2016, after having fallen by up to 38 thousand points, the Ibovespa has been consistently delivering…

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03/02/2021

Is it worth investing in an IPO?

Dear investors, The Brazilian capital market is experiencing a new cycle of IPOs[1]. Between 2019 and 2020, we had 33 companies debuting on the stock exchange, which moved a total of R$ 54 billion. In 2021, we already had…

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05/01/2021

Annual Letter 2020

Dear investors,   We ended 2020 with an annual return of 7.1%, higher than the Ibovespa and the CDI which totaled, respectively, 2.9% and 2.8% in the period. The accumulated return since the inception of the Fund, around…

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01/12/2020

Book suggestion

Dear investors, Considering that many usually take at least a few days of vacation in December and/or January, we dedicate this month's letter to the suggestion of five books related to the topic of investments. These are books we like...

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09/11/2020

Diversification thesis problems

Dear investors,   In January 2020, we sent a letter commenting on our portfolio management process and our strategy for determining the percentage of equity allocated to each position. A point of…

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13/10/2020

Investment case: Grupo Biotoscana

dear investors, For this month's letter, we will share a recent case from Arcádia, which was the investment in Grupo Biotoscana (GBT). GBT was a relevant investment in the portfolio from mid-2019 until…

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15/09/2020

Buffett's investment in Coca-Cola

Dear investors, On August 30th, Warren Buffett turned 90. To celebrate the date, we decided to bring you an analysis of one of his most iconic investments: the purchase of a relevant stake in…

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01/08/2020

Investments in quality companies

Dear investors, Throughout our conversations and presentations to investors, we always highlight the importance of investing in quality companies with a long-term vision. In this letter, we're going to discuss with a little…

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01/07/2020

Investment Case: Unipar Carbocloro

Dear investors, We had a few months with a very busy market. Given the period of uncertainty and anguish, we dedicate our last letters to more appropriate aspects for that moment, such as investments in times of crisis and…

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01/06/2020

Investing in stocks for the long term (Part 2)

Dear investors, Considering the turbulent scenario we live in, we have dedicated the last few letters to bring a historical perspective on stock investments. We have already written two letters on the subject, the first addressed the subject…

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01/05/2020

Investing in stocks for the long term (Part 1)

Dear investors, The moment of uncertainty in which we live, caused by the Covid-19 crisis, has generated large fluctuations in the markets, which can cause anxiety for investors, especially those who started investing in the stock market a long time ago.

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01/04/2020

Investing in times of crisis

Dear investors, In order to try to draw parallels and understand potential implications for our investment decisions at this time of the pandemic caused by Covid-19, we decided to seek a historical perspective of how the capital market reacted in other…

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01/03/2020

Investment case: Long-short in Bradespar-Vale

Dear investors, In this memo, we share with you an unorthodox arbitrage investment that we carried between 2018 and 2019 and it generated great results for us. It is a good example of using the risk-return asymmetry in favor…

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