TTI’s Portfolio Updates – End July 2019 + The Thanos Of Global Macro Funds Is Coming Back!

It’s been 2 months since the last update, and frankly, I’m just going to sorta rush through this post as well. Don’t intend to spend too much time here. So here goes.

As a continuation of the last post (TTI’s Portfolio Performance – May 2019 + Avenue Therapeutics Updates):

SG Markets

Total portfolio value in SG markets is SGD 291,294.

As stated at the end of 2018, I set out to shift my activities into global markets. The direction is clear, and I think I’ve executed on my plan thus far, shrinking the SG portfolio part to a fraction of what it used to be, as I moved capital into some of my biggest ideas at the start of 2019.

Bonds

Again, nothing much to talk about here, the bond portfolio is approximately SGD 550,000. I’m being very conservative in my accounting here, preferring to not include all the coupons that are already due and accumulated, since they are cumulative and payable at the conclusion of the term.

This means that come the day of reckoning, when the bond is finally due, I’d be expecting a blissfully big, obscenely obese, grotesquely glorious bump up in this component. 

Yes, in the mood for some alliteration there.

US / Global Markets

I’d let the charts do the talking as usual:

877) TTI returns July 2019

ROI has declined in the past 2 months, which has been rough. Compared to the high of 45% thereabouts, it’s been quite a drop.

Still, it’s sitting pretty at 28.07%, and if you’d offered that to me at the start of 2019, I’d take it without even giving it much thought.

Portfolio Size (US) has ballooned to USD 984,360.63, with YTD capital gains, excluding any cash infusions sitting at USD 117,464.70.

This is at least, part of the reason for the drop in overall ROI. The cash drag is serious, as the portfolio size has more than doubled since the start of the year, and I haven’t always had the chance to deploy the capital. Even as I type this, most of the capital hasn’t found a home sweet home just yet.

Yet, I make no excuses.

Cash drag is an excuse.

The other major reason for the dip in YTD ROI, is an ill-timed (well, actually, this is just a figure of speech, I didn’t even time it) short bet on Beyond Meat (BYND).

Having shorted BYND when it was trading at P/S of around…. I can’t rem exactly… around the ridiculously crazily insane number of 80x or something, I thought this madness must surely come to an end.

Yet, the repeated short squeeze due to the tiny float meant I had to throw in the towel and cover.

Fortunately, having sold options on both sides, (both calls and puts), the premiums have buffeted the losses nicely. And with the recently ER and subsequently secondary issue, BYND is FINALLY about to go my way.

Well, the float is still ridiculously tiny, even with the secondary issue, so I’m not outright shorting it just yet. Learnt my lesson here.

My guess is that the share price can’t exactly tank from here (It’s trading at USD 175 right now), but neither can it move up significantly since the secondary issue is at USD 160.

Coupled with the high IV right now, it’s a great time to be selling options on both ends with a WIDEEEE leeway.

Anyhow, back to the chart above.

There’s a more important lesson to be gleaned here, so much so that I’d reproduce the chart here again:

877) TTI returns July 2019

For a few days, the blue line (which is TTI, yours truly), actually dipped below that of the green line (SPX).

Well, of course I don’t consider myself infallible, but oh come on, how often do you see a 20%++ ROI lose out to a passive index?!

Yet, there we go.

SPX is on a roar this year. Despite dipping this week, it’s still around the 18% ROI mark.

That’s pretty crazy for a totally passive instrument.

I’ve seen, read, heard of many folks waving their successes around this year like a light sabre. (Most of which are not even calculated properly)

Well, hello guys, come back to reality. A semi idiot chucking his funds into SPX on the 01/01/2019, would’ve beaten many such geniuses, despite not having read a single financial statement or drawn any squiggly lines.

A rising tide floats all boats. Float it enough, and some boats may even think they can fly.

It’s just not as easy as what the typical retail investor thinks.

But ah well, I have resolved to not concern myself with all this. It’s hard enough bothering about my own portfolio.

Alright. Back to some math:

Total Portfolio

Taking a USD-SGD forex rate of 1.37165,

Total portfolio value sits at SGD 2,191,492 

(I’ve decided to change the format of previous reportings slightly by rounding out the cents. As the portfolio size increase, too many numbers make it confusing)

Real Estate

In my previous post, I spoke about real estate. I’ve since done quite a bit of work here… but with little results to show for. Many viewings, no real deal that I can find.

Yes, I’m extremely particular, but what’d you expect? I’ve just 1 silver bullet here, better make it count.

Anyhow, in the midst of my DD, I’ve come to realize that the last “en bloc fever” was around 1 – 1.5years ago, and many of the previous owners are now probably still flush with cash.

And these same guys are now in the market, standing on the “demand” side, and providing TTI with stiff competition.

Yea, well, I’m a loner and like to be in the “blue ocean”. Everyone else pls go ahead, I’d just stay out of this “red ocean” until the crowd thins a bit.

So there. I’m still sitting pretty and waiting for the crash that increasingly looks like it’d never come.

(If you haven’t realized, I’m referencing a very famous business book here)

https://www.blueoceanstrategy.com/what-is-blue-ocean-strategy/


Now, the 2nd part of this post is more exciting.

It’s just an…. announcement.

The Thanos of global macro is returning…..

This is 1 of the most read posts ever on SG TTI:

Lessons From A Super Investor – A Personal Friend Of TTI

Actually, it IS the most read one, despite me writing it 2.5yrs back, dating from Feb 2017.

Well well, guess what?

Asia Genesis Asset Management is coming back!

(OK, right now, I can’t rem if the newly incorporated company is Asia Genesis Asset Management or is it Asia Genesis Fund Management… we did have a couple of drinks when he told me the news……….)

But yes. The Thanos of global macro funds, Mr Chua Soon Hock, is coming back after a…. 10 yr hiatus.

And don’t bother googling it, the news is so hot, it’s not even off the press yet.

It’s interesting cos I always thought that if you are at a certain level, it’s always impossible to stay away forever.

Where’s the fun and excitement right?

So yeah, welcome back.

Godspeed.

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TTI’s Portfolio Performance – May 2019 + Avenue Therapeutics Updates

May 2019’s a tough month, and no, there’s no new “Best. May. Ever” series… (Continuation of these:)

Best. January. Ever.

Best. February. Ever.

Best. Mar……….. You Know The Drill!

TT Portfolio Performance & Review

Like most of everyone else, TTI’s portfolio ROI declined in May, alongside the volatility and market uncertainties from the trade wars.


SG Markets

Total portfolio value in SG markets is SGD 357,660.

Again, not much activity here, took profit on a tiny itsy bit of Geo Energy to redeploy into US markets, otherwise, holdings remain the same. I’m also not really spending much time looking in these waters.

Bonds

Again, nothing much to talk about here, the bond portfolio is approximately SGD 550,000. The intention is to leave all coupons to compound, with next to zero activity here.

US / Global Markets

874) ROI May 2019

ROI has declined from April 2019’s 40.61%, to the current 37.19% YTD.

Net Quantum investment gains YTD (excluding any capital injections/withdrawals) is thus USD 164,707.26

Current top/large winners include Wirecard, Avenue Therapeutics, Tesla shorts, JD.com shorts and a small position in the volatility derivative VXX.

The 2 biggest/most irritating losers are Centurylink (CTL) and Chesapeake Energy (CHK). I remain fairly optimistic about CTL, I just think the management needs to show a single quarter of revenue gain or even, just stabilization, and the share price would pop through the roof. In the meantime, I’m collecting like a 8% yield after the witholding taxes.

CHK on the other hand, is dead in the water. While Lawler has done a fantastic job deleveraging over the past couple of years, this may be too mammoth a task for him. Or he may need several years more. There’s hardly any difference in both scenarios.

Overall, I’m pretty pleased with how things are turning out for my US portfolio. Despite a drop of around 5% due to the trade wars in May, the gap between my ROI and the passive benchmarks is increasing, and the 3 indices I compare against are all at the 9-10% mark, and that puts my ROI this year at 3x that of mere mortals.


Alongside the huge volatility in May, the USD-SGD pairing also showed massive movements.

I’ve always said I’m no forex expert.

I don’t even think there’s such a thing.

But since my options activities generate a ton of USD, I’m naturally exposed to forex movements. With the recent drop in USD-SGD due to a perceived probability of the Fed lowering interest rates, I’ve taken the chance to swap out more SGD into USD, thus firing up my USD proton cannon again. It was really a great chance for me as the SGD was building up, and I simply refused to change it into USD at any rates above 1.37, thus had to end up borrowing USD for some of my US positions.

Total Portfolio

Total portfolio value sits at SGD 1,805,341.75

This value is likely to increase soon though, cos over the next few weeks, I’m likely to inject some serious cash into my US portfolio in anticipation of building up a new, possibly core, position. Still doing the groundwork on that idea.


Real Estate

Property is something that I only sparingly mention about in this blog. Cos I ain’t no expert here, I think there are already enough ppl who say they are property experts around.

Having recently completed the sale of a property, I now hold quite a bit of liquidity:

875) wealth premium acct

SGD 593k worth of bullets for deploying.

I haven’t quite decided what to do with it, so the money is just languishing around collecting meager interest. And a lot of annoying calls from folks who want to tell me how they can make me (and themselves) richer.

Currently, I’ve narrowed down to 3 options:

  1. Throw this entire SGD 593k into my property fund, and pray pray pray for a crash soon. This would bump up my SG property fund into a SGD 900k kitty, which would give me a ton of mileage if we get a crash.
  2. Deploy half into US Options investment portfolio, and stuff the other half into SG property fund.
  3. Find the next high conviction idea for a core position, something like Wirecard (Best. February. Ever.) or Avenue Therapeutics (Avenue Therapeutics – No Pain, Lots Of Gain?), and go crazy and throw everything at it. Go big or go home kinda stuff.

I really haven’t any idea what I’d do right now. SG property is still going ballistic. I’ve been looking and searching and viewing and saving and waiting for like… 3 years now, and after a slow and small little trough that’s hardly felt by anyone, the prices have gone through the roof again over the past few quarters.

876) SG PPI.jpg

It’s relentless! And now, Fed is posturing to lower rates again. Just great huh.

It’s really exasperating.

Just crash already! Damnit!


AVENUE THERAPEUTICS

Following up on my most recent post:

Avenue Therapeutics – No Pain, Lots Of Gain?

ATXI’s share price has popped since that post.

The share price as written in that post, was $4.57 then, and right now, as I type this, it sits pretty at $6.35, giving a 38.9% gain within the past month or so.

ATXI’s 2nd Phase III trials met all it’s primary AND the secondary end goals.

IV Tramadol has proven to be just as efficacious as IV Morphine (secondary end goal), and the markets are cheering what seems to be a straight runway all the way to a new drug application (NDA)

NDA is guided to be done by Q4 of 2019, which is consistent with their previous guidances.

TBH, although I wrote that I expected a catalyst upon the release of this 2nd Phase III results, even the rapid gain in the share price surprised me.

Why so? Well, cos…. I’d long expected the results to be positive! What else were you guys expecting?

Like I mentioned in the post, IV Tramadol is widely used practically everywhere else in the world, particularly in Asia and Europe. We’re not exactly talking about some novel drug with high risk of uncertainty here.

FDA still requires an independent Phase III trial (2 actually, not just 1) to be done, because that’s just the rules. Cos… well, some drugs have different effects on different populations, so ATXI and any other sponsors actually, can’t just tell FDA: “hey look, this works great on the Europeans!”

Still, this is an analgesic. Pain medication. I dunno how much difference it can have physiologically.

Anyhow, my ATXI position is currently looking really good, and I continue to hold. (Sold a tiny little bit but that’s to get rid of odd lots that irritate me, not really to take profit)

atxi

Current unrealized profit is around 18.3k USD, with a grand or so USD of realized profits.

From Lucy Lu’s investor call, we know that the company is now in the final phase of preparing for a NDA. I don’t see any hiccups on the horizon, so it’s probably going to be uneventful.

You can read about the call here:

https://seekingalpha.com/article/4268082-avenue-therapeutics-inc-atxi-ceo-dr-lucy-lu-hosts-investor-update-call-transcript

There’s still a huge discount in the current share price to the take over price. When asked about this, Lucy Lu’s answer (if I can just summarise it. She went on and on but actually really meant 1 thing), was that the company hasn’t gone out to raise it’s profile, so she thinks it’s simply cos of ignorance that the markets are “undervaluing” their shares.

In TTI’s opinion, whilst I certainly don’t think the markets are efficient, I also don’t think “ignorance” can explain the large discount in the share price currently.

IMO, I think the share price will continue to trend upwards closer to the takeover price of $13.92, but probably hover around the $8 – $9 range (just a random guess!), which is like a 40% discount or so, to reflect the uncertainty of the FDA application process.

Of course, if FDA approves, the share price will most certainly jump to the $13.92 mark, and in all likelihood, exceed that, to reflect the additional CVRs attached to the takeover offer.

Having looked through the 2nd Phase III results and the conference call, I intend to continue holding onto my ATXI positions, and/or possibly add to it on the dips.

Oh trust me, I’m trying everyday. But it’s low liquidity with wide spreads and the share price is just running so fast ahead. And I just don’t like chasing it.

Oh yes, before I forget… not sure if I mentioned this in my earlier post, but the initial idea of Avenue Therapeutics was brought to my attention by a reader.

Said reader has declined to be named or credited, and has requested that I don’t post any of our correspondence, so that’s all I can reveal.

His email set off a chain of events, leading me to spend countless hours researching on IV Tramadol, and an eventual position.

So thanks man.


On a different note, I’m also thinking that updating the portfolio performance every month is really too much of a hassle and, it’s probably also not useful. I mean, it’s where we end up at the end of the year that matters right, who cares what happens in between.

That’s all I have here.

Would rather spend more time looking into new ideas, than write about past ones. So Bye.