How Adam Wyden Continues to Win Big Over the Years Part 3: The Bump in the Road that Was 2018

No one wins all the time in the hedge fund industry. If anyone claims to do so, a closer look at their returns might be in order.

In the case of Adam Wyden's AW Capital, 2018 was a very challenging year. In fact, it was Wyden's first challenging year since the firm's inception in 2011, and it didn't bring insignificant losses for ADW Capital. However, it's often the most difficult times that reveal the most about a manager's skills and character.

Note: This is part three of an in-depth series on Adam Wyden's letters going back to 2014. Click here for part one on his strategy. Click here for part two on the bear market of 2015-2016. Click here for part four on the pandemic years, and click here for part five on the bear market of 2022.

In 2018, ADW Capital was down 33%, significantly underperforming the S&P 500's 4.38% decline and the Russell 2000's 11.01% drop.

In his 2018 letter to investors, Wyden again reminded them that ADW Capital "operates a concentrated, tax-sensitive and long-term strategy designed to minimize correlation to the broader indices with a focus on avoiding permanent capital loss." Of course, that strategy sometimes results in periods of underperformance in addition to the sizable outperformance the fund was putting up during its first seven years.