November 2025: Episode 5
James McFarland (00:00.12)
Hello and welcome to the November 2025 episode of The Long and the Short of It, where the investment team at Oak Harvest recaps the last month for Oak Harvest’s long short hedged equity mutual fund, OHFGX. I am James McFarland here with Chris Parris and Charles Scavone. We make up three of the five team members running the OHFGX fund. And for additional information on OHFGX, check out oakharvestfunds.com. You can find that link in the description below.
Now as usual, before we get to the meat of today’s video, let’s go over the return data for OHFGX as of the end of November as presented on Morningstar’s website. The NAV, the net asset value for OHFGX hit a new all-time high in early November but succumbed to the overall growth stock sell-off in the month. Year-to-date, OHFGX is up 17.9%, slightly outperforming the S &P 500, which is up 17.79%, and this is total return.
In our Morningstar peer group, OHFGX ranks in the top 14th percentile year to date and the top 15 % over a one year period. Now with all that said, let’s turn to the three questions we look at every month. Number one, what was the OHFGX portfolio management team thinking heading into the month? What key investment actions did we take during the month? And finally, how did things play out? So let’s jump into it. Chris, what were we thinking heading into November 2025?
Chris Perras
Thanks, James. Yeah, heading into November, there was a lot in the financial press talking about a meltup that was coming. We didn’t see that as a team. We were thinking we had already been up seven months in a row off of a V bottom. Usually, there’s some downtime in the eight month. And we were really focused on earnings and trying to hunker down for the earnings period there in November. So that’s kind of what was going on into November.
Alright, thank you very much Chris. So Charles, with that said, what were the key investment actions we took during the month of November?
Charles Scavone (01:57.464)
Yeah, thanks, James. I’ll pick up right where Chris left off. Four times a year, we have the opportunity to listen to companies report their earnings, give us some insight into what happened in the current period, and then more importantly, give us their view, their outlooks, what’s going on in future periods. And it’s a wonderful time for us to collect new data and then put our fundamental research analysts hats on, does this make sense? How does this impact these companies, customers, their competitors, and their suppliers. So we take very much of a food chain sort of view of the world.
And so in that light, just exiting earnings season, we added to some of our positions, but we did initiate a few new positions within the fund. In the industrial space, we added FlowServe, an industrial flow company, as the name implies. And they reported a great quarter, just this huge improvement in their order backlog as the movement towards power generation, and particularly nuclear, really has driven an acceleration in their business. Within the health care sector, we added to a position in Medtronic that after struggling for several years, we think has a great opportunity.
We can see that roadmap for an improvement in sales, marketing, sales margins return on invested capital. Apologize about that. Marketing is important as part of the sales effort. We re-entered into a position in Domino’s Pizza in the consumer area where we think there are definitely strong signs towards improving same store sales is important.
And then you have World Cup coming up. So that can be a big driver of ordering pizza, watching World Cup soccer here in the States. And lastly, maybe we’d spoken previously favorably our views on quantum computing. what we did here is initially we’d use sort of a basket approach. We picked a small positions and a handful of the names in the sector. And what we did this quarter after going through them more thoroughly, identified who we believe to be the market leader, which is IONQ.
And that’s based upon very solid business with their existing customers, very good outlook with some large customers, clients including the government. So we see very solid revenue growth, accelerating revenue growth, and they’re very well capitalized. So that was a name that we sort of coalesced around that. We focused in on the one name.
Yeah, that’s the horse we want to ride. Right. And those are the highlights of the line.
James McFarland
Very good. How about the short side of things where we look to profit by stock prices declining?
Charles Scavone (04:48.562)
Yeah, so it’s a wonderful position to be in to be able to express both a favorable view on a name and then have the opportunity to be able to express an unfavorable view on a name. So in that light and to answer your question, some of the same continuing themes existed within during the month focus on some of the strains, lower end consumers, particularly as it relates to credit. It’s definitely manifesting itself in the auto finance industry.
And we’re also within financial services, definitely seeing some cracks emerging in private credit space. We’re doing some more work there. But really as it relates to new positions, we initiated a new position on one of the audio streaming services, Spotify, where we love the product. It’s a great product, but very competitive industry that they’re in. And we’re seeing declines in user engagement and the rate of new subscriptions.
And that’s just not a good sign. Yeah.
After seeing a huge switch gears entirely in the we talked about the vacation and travel industry previously. Well, sort of new cracks are emerging in the cruise industry where after just years now post-covid of just a surge in cruise demand, we’ve seen first, a normalization, but now it seems to be a bit of a decline in utilization of cruises. And it’s coming at the same time that these companies have spent a massive amount of capital, debt funded, to build just a tremendous amount of capacity in the industry. And again, not a very good formula going forward.
James McFarland
We have people who’ve taken on a lot of debt to build capacity and then demand is declining. That’s great combination.
Charles Scavone
Yeah, yeah. So again, it may end up being good for the consumer at some point, because room rates on your favorite crews are going down, but doesn’t make for a good stock. Finally, there is a lot of concern and confusion around what’s going to ultimately happen with health care costs and with the Affordable Care Act. is health care insurance going to get incredibly more expensive?
So this has created a number of interesting opportunities within the healthcare space for companies who rely upon healthcare insurance to provide a flow of business into their company. So we’ve been active there. I see, very good. That’s pretty much it on the short side. Very good.
James McFarland
Well, how about the last leg of our three-legged strategy, which is the hedging program?
Charles Scavone (07:30.22)
Yeah, so obviously we make these stock bets. then to the extent that we deem prudent, we’ll try and hedge out as much or as little of the residual market risk as we like to. And really, the overall hedging costs were pretty much nil during the quarter. Not any big impact one way or another. Hedging costs were generally offset by a pretty productive covered call writing program. So no real impact on return.
James McFarland
All right, well very good. Thank you, Charles. And Chris, so take us through how did the month play out?
Chris Perras
Yeah, well, Charles went into a lot of the nitty gritty detail of what we did. It was one of those months that you had to take a step up the upper level in that the Federal Reserve kind of threw the market a curve ball. And although they cut rates, they talked very hawkishly about future cuts. And that caused a lot of volatility in the month of November.
So we’re really a growth stock fund. And growth stocks during the month had a bunch of headwinds because of that talk. And so the SP500, I think, sold off almost 6%, peaked a trough during the month. Volatility spiked pretty considerably. People pretty much ignored the strong earnings of all the large cap tech stocks, which we own a fair amount of because of our exposure to growth stocks. With that bias, I think large cap tech stocks were down like 4.4 % for the month.
The fund was down minus 2.14 % in November. And things that actually performed well were defensive groups, healthcare groups, staples, things that had lagged pretty much all year, rebounded considerably in November. And we don’t have large weights in those groups because there are slower growth or no growth in some circumstances of businesses and people kind of, investors ran for cover and try to hide in those groups when things get rocky.
James McFarland
It seemed like the indexes, the indices, were down a bit, but not to an excessive degree. But more growth-oriented names, perhaps smaller market cap names, were hit considerably harder than, like, say, the S &P 500 at the Dow Jones.
Chris Perras
Exactly, I mean, peak to trough, the S &P 500 was down 6%. It’s kind of disguised because of the huge rally Thanksgiving week. The four days S &P rallied almost back to flat on the month. Tech stocks rallied as well, but it wasn’t enough. There was a lot of intra-month volatility because the Fed was talking hawkishly throughout. And they kind of changed their stripes. A couple of people came out in the press. The week of Thanksgiving, is a low volume week in the market. So if people had been selling stocks are short, they suddenly had to cover.
Charles Scavone
It makes things very uncomfortable for us as a fund manager, Because things are going on in other sectors of the market. We’re not value investors. We’re growth investors. And so we feel as though it’s incumbent upon us to maintain that view. And so we don’t change course just because these cross currents occur in the market. We’ll actively try and take advantage of some of that volatility because we can adjust position sizes up or down and take advantage of it.
But we definitely, think one thing we do well is try and maintain a solid focus on what we do as growth investors and not just chase whatever is hot on a given day.
James McFarland
Especially over like a one month time frame. It’d be kind of maybe not the best course of action.
Chris Perras
Yeah, going down a level, as far as single positions, it was a good month for a wide dispersion of names in different sectors, names in the AI infrastructure sector. We did have some winners in there, including Coherent and Fabrinet, and then electronic box manufacturer Celestica, which has been a big performer for us. Outside of tech, investment in Wynn Resorts.
rallied nicely. They had some good data coming out of Macau and Las Vegas during the month. And then I think we’ve discussed before, we’re in a healthcare company, a drug company, Teva Pharmaceuticals had a big rally in the month. So that helped out. The most speculative areas in the market, which had kind of been leading here today, a lot of the quantum names that Charles referred, you know, they were the kind of losers on the month as people ran for cover.
And then once again, a lot of the software names that we’ve discussed for pretty much the whole year lagged the market. had some weakness there.
James McFarland (12:15.008)
Right. All right, well, very good. Thank you, Chris. Thank you, Charles. And as always, we will continue to focus on being able to move quickly and effectively executing on our highest conviction ideas and continuing to outperform our benchmark and our peers. Thank you again, Charles. Thank you again, Chris. And thank you for watching. If you’d like more information on investing with us in OHFGX, check out www.OakHarvestFunds.com. You can find that link in the description.
Thanks again for watching and we’ll see you in the next video.
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