Though XPO holds massive growth potential, we became increasingly uncomfortable with management’s aggressive stance of acquisitive growth. XPO induced further unease when management expressed 2017 guidance−a dangerous move in our opinion−and we sold our shares. Through a handful of name changes and three management teams our XPO investment proved rewarding over our 7-year holding period, compounding at 28%.

The above commentary has been excerpted from the 2014 annual letter of Arlington Value Capital .

The information contained herein is a reflection of the opinions of Arlington Value Capital (Arlington) as of the date of publication, and is subject to change without notice at any time subsequent to the date of issue. Arlington does not represent that any opinion or projection will be realized. All the information provided is for informational purposes only and should not be considered as investment advice or a recommendation to purchase or sell any specific security. While it is believed that the information presented herein is reliable, no representation or warranty is made concerning the accuracy of any data presented. This communication is confidential and may not be reproduced without Arlington’s prior written consent.

Indices are provided as market indicators only. It should not be assumed that holdings, volatility or management style of any Arlington investment vehicle will, or is intended to, resemble that of the mentioned indices. The comparison of this performance data to a single market index or other index is imperfect because the former may contain options and other derivative securities, may include margin trading and other leverage, and may not be as diversified as the S&P 500 Index or other indices. Index returns supplied by various sources are believed to be accurate and reliable.

Past performance is not indicative of future performance. Inherent in any investment is the possibility of loss.

This performance reporting is not an offer to sell or a solicitation of an offer to buy an interest in any Arlington investment vehicle. Such an offer may only be made after you receive the investment vehicles Confidential Offering Memorandum and have had the opportunity to review its contents. This reporting does not include certain information that should be considered relevant to an investment in Arlington’s investment vehicles, including, but not limited to, significant risk factors and complex tax considerations. For more information, please refer to the appropriate Memorandum and read it carefully before you invest.