Ladies and gentlemen, the wait is over, it is Kentucky Derby weekend! The May newsletter has evolved to become my most popular newsletter since I began writing a monthly newsletter. Given my affinity for thoroughbred horse racing and the number of close friends that race and breed thoroughbred racehorses, writing this letter has always been a joy! For some background on the newsletter, back in 2005, I founded a company named Vista Partners with two friends, Greg H. and Jeremy T. and all three of us lived on Vista Court in the Presidio in San Francisco. This is how the name Vista Partners came about. The three of us would banter about the markets, sports and anything else we enjoyed. So one day we are all on a call with a client rambling away about something and arguing with each other and the client suggested we should put our thoughts together in a newsletter as he found our thoughts to be insightful and amusing. With that, the newsletter was born. Jeremy T. left Vista Partners after our first year as did Greg H. to pursue other opportunities (money was not something any of us had much of back then but we built a substantial following with the newsletter). I departed Vista Partners at the end of July last year to start Sylva International and didn't think I would continue writing a newsletter, but after hundreds of you that read the material I wrote asked me to continue writing at Sylva, I felt obliged to do so and here we are. Going forward I am thinking I will make this a video "newsletter" given everything seems to be moving away from the "pen" and Greg H., one of the founders of Vista, is now a part of Sylva, which is awesome! Without further ado...

The market continues to rip (move higher) despite the fact a dude in Korea has the ability to wipe us all out (hopefully not), the EU is crumbling and our President seems to be all hat and no cattle "talk a big game but deliver nothing". I thought the markets would move lower in April as the move higher in Q1 was explained to me by numerous friends who trade for the largest funds on Earth as short covering. I figured funds would lay on their short positions again after Netflix delivered a weak quarter and I went short the S&P 500 around the beginning of April thinking I was smart. That turned out to be a terrible idea as the markets hit new highs in April and continue to do so despite the issues I outlined at the beginning of this paragraph and the weak GDP number for Q1, which we learned of last week. The negative economic data points we continue to receive have had no negative impact on investors, which is surprising especially considering the Fed remains on a path to raise rates at least twice this year. I would think raising rates into economic strength rather than weakness would make sense but what do I know? As the saying from John Maynard Keynes goes, “The market can stay irrational longer than you can stay solvent.”

My saving grace in the month of April was Soligenix (Nasdaq: SNGX), which rocketed up to $5.08 on April 19th on massive volume of nearly 27M shares that day, a near double or double for those who had been buying the stock the days and weeks before April 19th. Soligenix remains incredibly undervalued in my opinion and hopefully we learn when they will initiate their Phase 3 study in Oral Mucositis, with their clinical candidate SGX942, in the coming weeks. SGX942 could be a billion dollar plus compound/opportunity for Soligenix if SGX942 obtains FDA approval post the Phase 3 study, fingers crossed!

The Derby Pick

As I have stated in previous newsletters in 2017, this year has been one of the weirdest years of three year old races I can recall, nobody can be trusted. I began following horse racing in 1994 and that year a horse named Go For Gin won the Derby gate to wire and his victory was somewhat a surprise although six horses in that running of the Derby were sent off at odds of 10-1 or lower meaning there was a lot of parity that year. This year reminds me a lot of 1994 in that there is no standout horse. With that stated I think Always Dreaming looks like a freak of nature and his last two races were AMAZING! I think he and Irish War Cry are the two horses I will be backing on Derby Day. Post positions will have a GIGANTIC influence on the outcome of the race and if either of these two horses draw the rail or the 19 or 20 spot in the starting gate, I am looking elsewhere, where that elsewhere is, I have no clue. Given this is my 13th year of writing a May newsletter and I have picked the winner of the Derby three years in a row after a seven year drought, the odds of these horses I picked as my two horses landing on the rail or getting the outside posts are just about a certainty given that is how my life works. I hope they don't and my top 3 Derby horses are 1.) Always Dreaming, 2.) Irish War Cry & 3.) Classic Empire. Pray for me :)

Our "Sylva Standouts" are included in the hyperlinks below. Remember to read our disclaimers and disclosures as it relates to investing in anything we write about. Good luck with your investments, Derby selection (should you play the Derby) and have wonderful month and we will report back in June. If you need more Sylva in your life, who doesn't :), check out our daily ramblings on Twitter at https://twitter.com/SylvaCap?lang=en.