Month: January 2021

ThumbTack Fund Report 6 – Rose Of Jericho (2020)

A reader turned buddy just told me a couple of weeks ago that he quit his job, and will be embarking on the MBA programme at the uber prestigious MIT Sloan School of Management in 2021. He contributed a few articles some years back, so u can read some of his past work here. I’ve also shared some previous insight/discussions we had (with permission of course). I can’t believe these were all posted 3-4 years ago:

That’s such a nice way to end 2020 as I feel happy for my buddy. I don’t think anybody outta MIT Sloane’s MBA programme ever does poorly in life, financially at least. The alumni and the network you gain is just glitteringly strong. Also, many of the commonly used finance concepts and formulae, actually originated from Sloane.

Stuff like the Black–Scholes model,  random walk hypothesis and the binomial options pricing model. If I know about these, they must be damn famous.

The next few years will be tough though, cos the programme is a full time one, so there won’t be any income. Still, it’d probably work out to be 1 of the best lifetime investments for him. Investing is not always just about money. There’s an investment of time, investment of effort, investment of emotion, investment of intellect etc.

Ditto for returns as well.

Lemme get down to the customary year end fund report. But first, these are the other 5 TTF Reports I’ve posted previously:

ThumbTack Fund Report 6

YTD Money Weighted Returns for 2020: +89.83%

TTF’s NAV reached a new high to close out 2020:

Ending NAV: USD 333,721.16

Deposits: USD 214,153.23

Nett Gain: USD 119,567.93

Since Inception in Feb 2020:

SPY has returned +18.42%

VT has returned +18.45%

STI has returned -9.83%

TTF has returned +90.37%

Surprise Surprise… SPY and VT actually ended the year with the same performance.

After a horrendous 1H, STI did pretty well in Q4, recording a +15.29% to end the year with a -9.83%.

TTF had a stellar Q4, recording a +41.83% return for the last quarter of the year to end strongly.

This pie chart is extremely misleading though. Cos for eg, I could’ve large long positions set up via options, but it wouldn’t be reflected here.

Equity value (blue bar) dipped in Dec, compared to Nov, mainly due to profit taking on GME, which shot up… I dunno how many percent in the past week. Nett gain on GME was almost +100% on my direct equity positions. And that’s not even including profits from GME options. Correspondingly, cash holdings (green bar) shot up to a new high for TTF, since inception in Feb.

I got to find a new home for all that cash soon.

I’ve only utilized leverage once in Sep 2020 (green bar dipping into negative), and that’s mainly due to the large position in MELI. As 1 option contract = 100 shares, and MELI’s share price is in the thousands, having 1 contract assigned means it’d be a 6 digit position immediately. I chose to borrow in USD so as to avoid having to switch SGD to USD momentarily, seeing that USD has been, and still is, weakening against SGD.

IB treats currencies as a position, so the “Singapore” positions are actually merely SGD. I don’t have any position in SG equities. Not in this TTF at least.

Overall, it’s been a rather successful 2020 for TTF. Since inception (at the worst possible timing), I sought to hold minimal cash initially and hence, was caught out by the sudden plunge in the global markets. TTF’s returns continued to plunge throughout Feb and March, severely underperforming all 3 benchmark indices, even as I continued adding to positions in March.

The recovery though, was just as violent. After outperforming the indices in May for the 1st time, TTF never looked back, extending the lead with vigor, particularly so in November and December.

Dividends for 2020 came from AVGO, A and V, totaling up to USD 2,736.

This figure is before the 30% WHT tax though, so actual dividends work out to USD 1,915.20

It’s been a tough 2020 for some folks. Personally, I haven’t been affected too much tbh, aside from the increasingly irritance of not being able to travel and feeling the occasional cabin fever. But I’ve friends/acquaintances/relatives who have been really affected. So well… I’m kinda cognizant of this fact and am careful not to sound too cheery.

If you’re in the travel industry, for example, it’s hard for 2020 to be anything but a tough year. Life’s not fair, sometimes, some folks get into trouble through no fault of theirs’s.

A non-local pilot told me he just got retrenched a few months ago, as the airline had to “show solidarity with fellow Singaporeans”. He wasn’t bitter about it, in fact, he actually looked pretty cheery still.

Anyhow, just to illustrate the situation, the said pilot told me that aviation laws mean that a pilot cannot fly more than 100 hours within 1 calendar month. In Jan, he flew 98 hours in total. That’s like a career record for him. That’s how busy it was pre-covid. There was simply a shortage of pilots worldwide.

Yet, by April, he was flying a grand total of 0 hours. That illustrates how badly the entire industry went. It literally just dropped off a cliff. 1 moment you see it, next moment it’s all gone. The dude also told me he’s still hanging in there though, hoping to tide over this whole thing. He thinks when covid lightens up, travel will come back strongly, and pilots would be in huge demand, as the industry started with a shortage pre covid, and during this entire period, all the pilot training has been mostly suspended/disrupted.

Plus, anecdotally, many of the older pilots have chosen to retire early. The problem is, everybody knows air travel will come back 1 day. Nobody knows for sure when. If you are a pilot nearing retirement age, it makes sense to just call it a day sooner, instead of waiting and waiting. When air travel comes back, you might not even be able to fly anymore due to the mandatory retirement age.

So it’s obviously been tough for certain segments of the economy. And this is not a “oh it’s tough just hang in there for a while” situation. It’s a life and career changing kind of tough. New level.

This post is titled “Rose of Jericho” for good reason.

After an initial very tough start to the year and to inception, (recording a -55% drop at 1 point!), TTF recovered very strongly to end the year on a high. Just like the Rose of Jericho (also known as the resurrection plant), resilience and adaptability was the key in 2020.

I mean… just watch this, this is like alien level kind of stuff:

I hope TTF needs no resurrection in 2021 though.

No, thank you. My poor heart cannot take another 1 such hit.

Yeah, I wanna go to heaven.

I just don’t want to die to get there.