Author: ThumbTackInvestor

“Treh-Bu-Quah!!!”

TTI is back after a 1 month hiatus.

I’ve been ticking off life goals… in an earlier post, (It’s somewhere around here. Lazy to go dig through and link it to this.) a reader commented that I should visit Mont Saint Michel in France over the famed Meteora in Greece… and since he’s actually visited both and stayed in France for some time, I’d defer to his expert opinion.

So I did.

And this is really as close as one gets to being Jon Snow.

I mean… This is Harrenhal in GOT:

777) harrenhal-corfe_castle_dorset.jpg

And this is real-life Casterly Rock:

778) Casterly Rock.jpg

And of course, we have Winterfell:

779) Winterfell.jpg

And Dragonstone, which in real life, looks a lot more underwhelming than the CGI-ed version in GOT:

780) Dragonstone.jpg

And…. there’s Mont-Saint-Michel in all its glory, without any CGI:

776) MSM.JPG

Doesn’t look out of place right?! We just need to CGI in a dragon perched on top of the tower.

OK, with TTI’s excellent CGI skills, there. A scene straight out of GOT (with some imagination pls):

782) Dragons.jpg

Simply WOW.

When the tide comes in, it’s even more beautiful as the vast array of beach u see there gets completely submerged.

The feeling inside is well… wow. I can’t describe it. It’s kinda like getting teleported to ancient medieval times. (OK, the hordes of tourists spoilt the mood somewhat tbh. It’s neck to neck crowded.)

I’m really glad I took the suggestion though, cos this is not a place for old folks. It’s now or never.

They tried to keep the original structures intact as much as possible, so there are no elevators or escalators, and the stone paths are really stone paths, and the stairs are uneven in height and hard to climb . Not something for the immobile. The young kiddos managed without too much difficulty though, despite it being really super duper crowded.

Close up, it looks as stunning as it really is:

781) MSM close up.JPG

We climbed all the way to the peak and had a sandwich picnic at the top, overlooking the entire moat. Absolutely stunning.

What’s even more memorable is the night before.

We wanted to get night pics of the place, and there’s a long tiny road with a fast flowing stream just beside it, and it was freezing cold but we walked something like 5km just to get nearer to it for better pics. (But to no avail. I’m not camera enthusiast so the iPhone pic didn’t turn out well)

The walk though, is strangely…… very fun. In the dark of the night, with the wind howling, freezing cold, and since there’s nothing else to do besides walking, we ended up talking a lot.

It’s just a different experience.

Anyway, so what’s “Treh-Bu-Quah”?

We went to a place that actually demonstrates the medieval way of living. It’s really as realistic as it gets. You get to even learn sword fighting (with real blunted swords and shields), try out real archery (they call it something else but I can’t rem the term now), do masonry, craft pottery, leather weaving and THIS is probably the highlight for me:

These guys show how a real operational trebuchet works.

WordPress very irritatingly, doesn’t allow me to put videos here, so I’ve to create an account in a video sharing site for this:

“TRE-BU-QUAH!!!” (LOL I guess that means Trebuchet?)

Very cool right?

The next guy though, kinda got his physics wrong, and ended up launching it way over the wall!

“Oh my gosh!” LOLOLOL!

You can literally hear the “OOOOOOHHHHHHH!!” cos it’s not really just a wall, but some sort of a tower where visitors can enter.

So the projectile could’ve landed and really injured somebody inside…

But of course, they didn’t really use a real projectile/missile. It was some soft rubbery ball filled with some powder inside, that exploded on impact.

Still, you can literally sense his embarrassment at missing. He quickly walked away.

Everybody was chuckling and it was a bit funny tbh. After that, when everybody left, I saw him vigorously discussing what went wrong with another colleague (or maybe his boss)

Anyway, I’m back to reality and back to work, so no more tre-bu-quah-ing for me for a while.

I kinda missed working after a while tbh. When the holiday’s too lengthy… it gets a bit boring. That’s my hypothesis anyway.

The best parts of a holiday are at the start of it. So I try to keep it relatively short.


A couple of months ago, a friend and investor suggested to me over dinner that I should keep track of my returns on a daily basis. I’ve been only tabulating returns every quarter, so as to avoid “short termism” in my thinking, but what my friend suggested made a lot of sense.

His rationale of tracking daily returns is not to try to find short term ideas, but simply so that one can track back and see where are the times when there’s a major drop in your portfolio. You can then go back and see what are the events that caused that major drop, and dissect your actions or thoughts in relation to that major change (ok not necessarily drop. It works for a big rise too)

So in short, daily data would have the sensitivity to allow us to make such retrospective assessment.

Well, I respect the track record of said investor, but tracking every day is a bit of a chore for me. Fortunately though, Interactive Brokers does it automatically for me so for now, I’d use only my global equities and options portfolio (excluding SG).

All right, so this is how TTI’s y-o-y, time weighted returns look like. I’d attempt to glean some insights from it:

783) yoy returns

Note that these are all time weighted and irrespective of capital injections or withdrawals.

These are my thoughts:

At 1st glance, I should be pretty happy with 15.24%. I mean, as I’ve worked out previously, if I could compound 15.24% annually y-o-y, year in year out for the next 35 years or so….

TTI Is Banking On The Eighth Wonder Of The World

Now, I really like the table comparison in the post, but wordpress makes it difficult to cut and paste here (I can’t actually). I’d have migrated to a different host but anyway, I predict that I’d have to defunct this blog a year from now, so lazy to do so.

A 20% ROI compounded will bring me up to several hundred millions, so compounding is really the 8th wonder of the world. My capital is somewhere just below the 3rd year mark… so I’m actually 1 year ahead of schedule. It shouldn’t be too difficult to cross the 3rd year mark by the end of 2019. In fact, I’m hoping to bust the 5th year target of $2,488,320 by then.

So 15.24% did put a smile on my face (FY18Q2 -“Fun Isn’t Something One Considers When Balancing TTI’s Portfolio. But This…(heh heh heh heh) Does Put A Smile On My Face.”)…. until I saw this:

784) S&P.jpg

Oh COME ON!

Give me a break!

A freaking passive S&P index ETF would’ve generated a ROI of 17.98% y-o-y!

Dang.

And that’s excluding the 1.7% worth of dividends that one would’ve received.

It’s truly been rather difficult to beat a passive instrument like SPY these couple of years. (Forget about the chronically ill STI ETF).

I suspect most money managers would not have beaten SPY. Much of this 17.98% is driven by powerhouses like Apple, Netflix and Amazon… so to beat this, one would’ve to have similar constituents to the S&P index, and yet, have a larger weightage of holdings in the few powerhouses while avoiding or reducing the poorer performing constituents.

Back to the chart:

785) volatility.jpg

The other thing that struck me is the immense volatility.

At it’s highest, my TWR was a massive 27.14%, while at the lowest, it was a scary -9.35%.

If I did not have this chart, and I was asked arbitrarily to guesstimate how I’ve done thus far comparing to the same point in time 1 year ago, the chart that I’d guesstimately draw would be completely different from this.

For starters, it’d probably be much more gradual aka with less volatility.

Lastly, with the data, I’ve gone back to see what are the conditions/holdings that caused the big drops in early Feb and end June.

Early Feb is easy. That’s the 1 week of mayhem where the huge record jump in volatility bankrupted many poor folks around the world (1 of whom I communicated with on SeekingAlpha and sadly, I don’t think he’s ever coming back from that again. It’s a total wipeout)

End June is all thanks to Diebold, for which I took a big hit. The lesson learnt there is to learn the lessons that I preach myself. It was a small position that got bigger over time with the put options that I wrote. Yet, I continued paying as much attention to it as though it was insignificant.

786) low.jpg

The past 2-3 weeks has been really kind to my portfolio though, as the TWR has more than doubled since the low of +7.16% on the 16th Aug 2018, to the current +15.24%.

That’s thanks to a bold position in GDS Holdings (11% Returns In A Single Day. Thank You Blue Orca Capital!), as well as some equity and option positions in Broadcom, Bausch, Visa and in Disney.

So all in, I’ve found the suggestion by my friend to be extremely useful. There are other thoughts that I wouldn’t include here, but I’d urge other fellow investors to consider implementing such a system. Frequent trackbacks and analysis of one’s actions is really rather useful to review your previous thoughts and the outcome of your actions.


I’d end off this post with a real life account of a reader, who has rather impressed me.

I’ve obtained permission to publish these communications, but without identifying him though, so let’s just call him “FF”.

Font for the emails is small, but do read cos they tell a story…

FF first wrote to me over a year ago, in June 2017:

787) FF email.jpg

FF is an accountant by training, but as he self admitted then, “my skills in equity is not up to mark. I am still learning to improve my returns.”

It’s a funny thing, but many accountants that I know personally, are actually really terrible investors. I’d have thought that they have a huge headstart, cos you don’t have to learn the language of business, yet many actually… don’t know a lot. Anyway, that’s just anecdotal and my personal experience.

After some back and forth questions and discussions, which probably made him more confused, FF ended by saying his resolution for the year (remember it’s 2017) is to learn certain concepts, and he wanted to understand options as well:

788) FF email.jpg

I didn’t hear from FF again for the next 6 months.

FF emailed me again early this year, and this time, he’s obviously upgraded himself a fair bit!

789) FF email.jpg

FF made a mistake (in his own words), having sold a naked call that he was subsequently forced to cover. That impacted on his returns.

790) FF email.jpg

Still, as FF assessed himself. “the results show encouraging (sic) should the mistake not be made”

791) FF email.jpg

By now, we’re going into March 2018, and FF has obviously been doing a lot of work on this front. Having started by questioning, trying to understand and debating some of my positions, like VRX and CTL, he’s now progressed to his own ideas.

I’ve no positions and never have, neither have I ever done any DD on micron tech. It’s all his.

Accordingly, of course I didn’t have much useful insight to add.

FF did very well though in his positions in micron tech, booking a profit of 66% then.

Finally, FF sent me the records of what he’s done to take a look. It’s really in it’s infancy then, so it wasn’t hard to understand, but I was pretty impressed when I saw it, cos… well, less than 1 year ago, this is the same guy who has no idea what I’m talking about!

792) FF email.jpg

well, 2 months later, in May 2018, FF emailed me again:

793) FF email.jpg

This time, FF included some hard figures for me to consider. Nothing too comprehensive.

The tables are turned this time though, cos I had no idea what he meant by the “DC” column, and FF had to explain to me that DC = Diagonal Calls, and how they work.

As of July 2018, FF did really well with an over 20% annualized return:

794) FF email.jpg

August 2018 though, hasn’t been too kind to FF as his Option positions in JD turned sour. Still, I’d say a 14% annualized ROI is really not too shabby. (OK, we all fail to beat SPY this year YTD, but if we compare to STI ETF, it’s a sound trashing!)

795) FF email.jpg

796) FF email.jpg

Alright, and I’d stop the correspondence pasting here.

Looking at what he wrote and the attached table though, I feel really delighted for “FF”.

Particularly so with what he did on SEDG. Again, it’s all his idea, but I think what he did there captures the essence.

Let’s consider that about a year ago, this guy has absolutely no inkling what’s going on.

FF decided he wanted to learn something, and despite crediting me, I’d be honest and say that he did everything himself.

This guy just kept disappearing for a few months at a stretch, and each time when he comes back, he’s upgraded and improved! LOL! Like Iron man! From the chunky makeshift armor made in the desert, to the Mark II version, to now, the nanobots version!

And looking at his table, that sort of monthly cashflows considering the small capital he’s committed, is actually very very good. (TBH, I don’t share his enthusiasm for JD.com though, but I have no insight to add to the DD he’s already done himself)

FF has an account in InvestingNote, but he makes zero comments, has zero posts, and only followed 1 person: TTI.

He’s like a submarine, disappearing in the depths to go do his thing stealthily and covertly……. and surfacing once and then to probe around.

I’m genuinely impressed cos I think there’s a lesson here. Much like what I’ve learnt from my friend’s suggestion of daily tracking above, FF has continually done self assessment, asked probing questions, modified, implemented, and back to assessment again.

Now, isn’t that how learning should be like?

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11% Returns In A Single Day. Thank You Blue Orca Capital!

Damn, the title looks so clickbait-ish.

Except it’s not:

771) GDS.jpg

Approximately USD 5.5K + of returns in 1 day, with an invested capital of approximately 50K +.

Here’s the story.

3 days ago, Blue Orca Capital released a short attack on data centre operator, GDS Holdings. You can read the specifics here:

https://static1.squarespace.com/static/5a81b554be42d6b09e19fc09/t/5b6070a60e2e72e41d0d78aa/1533046975799/Blue+Orca+Short+GDS+Holdings+%28NASDAQ+GDS%29.pdf

BTW, I love how they open their short sell reports:

“THIS RESEARCH REPORT EXPRESSES SOLELY OUR OPINIONS. We are short sellers. We are biased. So are long investors. So is GDS. So are the banks that raised money for the Company. If you are invested (either long or short) in GDS, so are you. Just because we are biased does not mean that we are wrong. “

Well, few people who are not vested will be interested to click on that link and read the entire short report, so let me very quickly summarize it.

1 of the key reasons for the short seller’s attack is the fact that GDS Holdings reported a 94% utilization rate for their flagship data centre – the G6 Building. However, Blue Orca managed to speak to 2 other independent data centre operators, who claim to be operating data centres within the same G6 Building.

One of them, GZIDC, offered the undercover Blue Orca guys a significant amount of space in the same data centre, even following up with a quote.

This led Blue Orca to conclude that GDS Holdings was overstating their “100% committed and 94% utilization rate” of G6 Building. (Since 2 other separate independent operators utilize large areas of G6 Building too)

In other words, Blue Orca was accusing GDS Holdings of basically being a scam and overstating their utilization rates when… well, nobody’s actually using the areas.

Fortunately for me, in this instance, I actually do know someone working in the industry and based in China. Although he had no specific knowledge of G6 Building itself, he told me that in the industry, it’s common practice to have many master leases and sub leases, and even more than 1 sub lessee.

That made sense as the industry is fragmented, and many smaller data operators often band together to negotiate their leases.

It wasn’t clear at that point in time, but GDS Holdings has since released a statement that confirmed my initial suspicions, and collaborated what my friend told me:

“GDS has commitments for 100% of the space of GZ1 from two customers.  GDS is currently receiving revenue for 94% of the total committed space of GZ1 from these two customers, which is in line with the Company’s definition of “area utilized”.  The two operators referenced in the Report are leasing the capacity from one of the above customers.” 

In short, GDS Holdings deals with only 2 customers, 1 of which has subleased their space to 2 other data centre operators. GZIDC was one of them, and that’s who Blue Orca spoke to!

So while there were “rows and rows of servers” that were un-utilized, as reported by Blue Orca, technically, well, to put it crudely, it’s not GDS Holdings’ problem.

It’s the problem of the 2 customers. As long as the 2 customers are good for the money, GDS doesn’t need to bother about whoever they lease to, or the lack thereof.

So perhaps we can fault GDS Holdings for being errr, inaccurate in their language used when reporting…. that’s about all we can fault GDS Holdings for.

“94% utilization rate” suggests that 94% of the available capacity is utilized… but in reality, GDS is actually “receiving revenue for 94% of the space for GZ1”.

Not quite the same. But, not really a biggie either.

There are some other points too, but I shan’t go into the specifics of each point because honestly, come on, put your hands up, up to this stage, how many people really understand what you just read above?

Unless you’ve some understanding of the background situation, otherwise, well, I’m just talking to myself.

So let me just talk about what I did.

I took a day to quickly try to figure out what exactly happened. 2 days after the short sell attack, which is yesterday, I decided to deploy significant capital on GDS Holdings.

I postulated that the outcome is pretty much binary. The share price has already tanked something like 36% since the short attack.

Either GDS Holdings is a fraud like what Blue Orca suggested, or Blue Orca is wrong and GDS Holdings will see a sharp recovery in its share price.

Since GDS Holdings is reporting results on the 14th August, this  means they’re in a sorta “blackout” period now and can’t really reply in detail or risk releasing sensitive info that they’re not supposed to release. This tells me that Blue Orca is not really interested to just sink the company legitimately. They want to attack when GDS is at its weakest, knowing fully well that GDS is unable to respond adequately during this window.

In any case, I figured that at the very latest, GDS would be able to refute the accusations when they release their results, which is less than a fortnight away.

So after doing some DD, I decided to deploy significant capital that same night. I sorta announced it on IN actually:

772) Announce

I ended up buying 2,000 shares of GDS Holdings directly, and selling several put options (set aside another $50k or so to back up the puts I’ve sold)

And I’m actually late to the game, as the share price has recovered 20% or so by the time I’ve entered, as I spent a day trying to figure out if Blue Orca’s assertions were actually valid.

The 1 thing that I do have to learn to do better… is to stop trying to nit pick on the pennies.

My profit would’ve been at least a few more grand more, if I had learnt to stop trying to wait for a better price, and just get it at the bid price once I’ve decided. Afterall, if we’re dealing with a unique situation, these pennies don’t really matter in the big picture.

Waiting and waiting cost me dearly.

I also opted to sell some put options because with the massive drop, the volatility of the options made the premiums really juicy for the risk accorded.

773) GDS implied volatility.jpg

140% Implied Volatility!

So… what next?

Unlike in the case of Broadcom and Disney, I intend to take profit in this relatively quickly. It’s not a long term hold for me.

The reason being simply valuations. GDS Holdings may not be a fraud IMO, but it is certainly not cheap. The company has not have any free cashflow, as they channeled funds to grow quickly. On top of that, GDS has relatively high debt, and high receivables as well.

This can turn out to be a toxic combination if it snowballs, we  just need a couple of these receivables defaulting and things can get tricky.

Sides, my thesis for investing to begin with, is to capitalize on the fact that Blue Orca (thank god for these guys!) created a massive and sudden drop in the share price.

774) GDS share price.jpg

Let’s see how this pans out over the next few days/weeks.


I’ve previously written about Broadcom:

TTI: “I’m Sorry, It’s All Over Between Us. I’m Breaking Up With You”

Since then, I’ve expanded my positions, selling some naked calls and more puts.

Tonight…. is when I “harvest” the 1st set of expiring put options:

775) AVGO.jpg

The share price right now is around… USD 215.30.

Unless something absolutely crazy happens in the next few hours (like Trump and Kim nuking it out suddenly)… I’m pocketing my USD 1,715.71 tonight.

And unless something crazy happens in the next 5 trading days after today, I’m expecting the calls to expire too.

With Broadcom, I’m happy to wait longer, hence, my exit is likely to be in the form of an exercised sold call option.

This is a different situation from GDS Holdings, whereby I’d probably not sell any calls, but take profit by exiting directly.

Next week will be real exciting as several of my holdings, esp the long term SGX listed holdings, announce results.

I probably won’t have the time (or interest actually) to write about them, cos I’d be off on holidays right after. So, that’s all I have here.

Have fun investing.