TT Fund: From -146.63% To +14.11% in 2.5 weeks!

1st up, note that TT Fund is not = my personal fund. But I retain all rights to invest it as I deem fit.

In my last post, which was barely what, 2 weeks ago?, TT Fund’s ROI has changed dramatically. And I mean dramatically.

From -146.63% To +14.11% in 2.5 weeks!

In my last post (TTI’s Personal US Fund + TT Holdings Fund Results YTD), TT Fund’s ROI was an absolutely horrifying…….

808) TT Fund

LOL. -146.63% MWR.

I got a little kick out of writing about it actually. It’s kinda funny.

That’s what a short term MWR can do to you. How is it possible to lose more than a 100%, but it is what it is. Hey man, I don’t do the calculations.

Even the TWR as shown in the previous post, was terrible:

809) TT Fund TWR

-11.06% looks bad, but it’s certainly better than losing more than a 100%!

In that post though, I’ve wrote:

“It’s still early days, I was unlucky in timing, but it’d sort itself out in the longer term. The gains will stack up with time, so I’m not too worried. The quantum itself is small anyway. Luckily I’ve only deployed about 25% of the TT Fund’s funds.”

Well, just 2 weeks later, things are looking decidedly brighter:

TT Fund.jpg

Ah there. The exact same measure (MWR).

That’s what a couple of brave bets in the midst of volatility can do for your portfolio. Wonders. A >160% reversal in 2 weeks. That’s like Liverpool coming back from 3-0 down to win the Champions League 4-3 with a last min goal in the 94th min.

This crazy episode packs some lessons though:

  1. In the longer term (ok ok I get the irony here. 2 weeks more is not exactly “longer term”, but I’m using the term in a generalized way), getting in at the wrong time isn’t going to be a complete RIP for your portfolio. So I’m a lousy market timer. That’s ok. It’s not part of my game anyway.
  2. Having capital to capitalize when the world is running scared, is absolutely critical. Hence regardless of whether it’s TT fund or TTI’s personal fund, they’d both have a reasonable amount of liquidity at all times.
  3. When it’s raining gold, reach for a bucket, not a thimble. OK, I stole that from WB. Quantum wise, I didn’t exactly reach for a bucket, but as a % of the portfolio NAV, it was a massive tank.

Even TTI’s personal fund did pretty ok throughout the volatility of the past 2 weeks:

TTI fund.jpg

6.49%

That’s slightly up from the 6.03% I posted 2 weeks ago. (TTI’s Personal US Fund + TT Holdings Fund Results YTD)

Yet in this 2 weeks, the MWR actually went all the way to negative (albeit just barely), before going up to 6.49% right now. So that’s how volatile it is. Imagine I freaked out and “cut loss” when it dipped into negative territory. I guess I’d be singing a very different tune today.


The bulk of the returns came from long bets in Broadcom (AVGO), Bausch Health (BHC) and Centurylink (CTL). I was also very much long volatility (VXX) at the start of the market weakness, and took the chance to offload VXX positions and at the same time, swing to shorting VXX (not directly, but indirectly by selling naked calls)

For BHC in particular, I got real lucky and went for broke in both TT Fund and TTI’s personal fund, at the exact bottom, betting that the quarterly results will again surprise the markets. Feels good to beat Bill Ackman in this instance. LOL.

BHC.jpg

I’m not thinking that everything’s hunky dory though.

Thus far, TT fund has short positions in 2 names: Herbalife (HLF) & JD.com (JD). They’re not direct shorts, but short positions in the form of sold naked calls. None of the calls have been exercised, and all have thus far at least, either got covered profitably, or expired uneventfully. These are whatever’s remaining:

TT Fund.jpg

I had some shorts on Tesla as well, but quickly covered those and stayed out as I’ve come to realize that the financials don’t quite matter for Tesla. The company can be crap, I can be right, and still lose a ton of money. Simply cos a large premium baked in Tesla’s share price is EMOTION.

It doesn’t have to be fundamentally supported. It just doesn’t make sense. It’s emotional. The crowd loves Musk. Even I love Musk when I was short Tesla tbh. All that talk about Tesla’s negative cashflows and repeated capital raising, is missing out this vital point: Musk himself is Tesla.

I betcha if Tony Stark and Stark Industries were real… anyone shorting Stark Industries would be dead. Completely dead. Imagine this: Aliens invade New York, and after Stark destroyed their mothership…. imagine the news headlines!

Stark Industries share price would rocket like the prodigal Mark III suit.

Never mind that the company would probably have had to take a massive write down in the number of suits destroyed. Their missile inventory would’ve been depleted, NAV would’ve taken a massive hit, and future CFs would’ve to consider replenishment of inventory and “spare parts”.

Plus Tony would get more paranoid and probably allocate 99% of the revenue into R&D to get the new nanobots suit that we see later when Thanos came. So we know the R&D expenses and the SG&A expenses would shoot up.

Ultimately, Stark Industries earnings would come in crazily massively negative. Like ridiculously negative.

But I’m pretty sure the share price would go ballistic.

So there. This is a perfect example of Tesla.

And BTW, I think Tesla’s reported positive CFs in the latest quarter is not sustainable. Markets are going to be sorely disappointed if they think it’s hunky dory from here on.

How does 1 “play” Tesla?

By staying away.

(Or u can ask Thanos when he’d be arriving. And I’d say, prob short Tesla/Stark Industries just before the aliens invade, and cover quickly and go long at the peak of the invasion, since u know that the avengers would always win and the jubilation from the win would sky rocket the share price after that.)

Greenlight Capital’s Einhorn made the massive mistake of looking at the financials. Of being value focused… in a situation whereby the whole world isn’t. And would likely not be anytime soon.

I think Einhorn’s not wrong. In fact, I think he’s very right. But I also think he’s going to lose a lot of money being very right. And therein lies my deepest thinking:

One doesn’t have to be right to make a lot of money. It’s a complete fallacy.

One just needs to be very much different from everyone else, and THEN, have everyone come over to your different opinion. And preferably come over real soon after you’re ready.

yup. there. I’ve said it.

Right now, I’m looking real deep at a 3rd short idea. I’d probably start selling calls on that, thus far, it checks all the boxes. Perhaps I’d write about it when I’m done.

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TTI’s Personal US Fund + TT Holdings Fund Results YTD

I’d just let the figures do the talking.

There’s too much stuff to track now, and it’s getting messy and arduous. In the longer term though, as I shift my personal funds into the holdings’ fund, it’d simplify things a bit more. Gotta eat my own cooking.

In the meantime, here goes:

(I’m excluding my SG portfolio in this post, nothing much has changed since the last update, except for the paring down of some stakes and some cosmetic additions and divestments, all in the same usual names.)

My personal US fund did pretty well in recent times, as I was positioned to profit from the volatility with some volatility derivatives. Also, I set up some short positions just before the recent bout of redness.

I’ve previously gripped about how an otherwise excellent performance…. is really mediocre cos I’ve failed to beat a passive S&P index ETF:

“Treh-Bu-Quah!!!”

Well, the tide has changed, it seems:

<Drum roll please!>

806) TTI personal fund.jpg

My personal US fund did a credible 6.03% YTD thus far.

Well, I just say its US, but it really is more global in nature, seeing that I’d on occasion, take up stakes in HK, Jap and Chinese companies too:

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

Divestment Of Shinsho Corporation & Kobe Steel – TTI’s Post-Mortem

Year on year, it’s even more impressive:

807) TTI personal fund yoy.jpg

14.29% MWR yoy makes me a happy man.

But, not quite when I’m losing out to a passive index, as I’ve stated many a times previously.

Well well well, what a difference a couple of months (since this post: “Treh-Bu-Quah!!!”) makes…

Cos with the recent bout of volatility and the S&P getting decimated in the past 2 weeks, suddenly, SPY ETF ain’t so tough anymore huh.

808) SPY returns.jpg

Someone who bought SPY at the start of the year at US$268.77, would’ve collected US$3.67 in dividends YTD.

So inclusive of the dividends, the ROI would be bumped up to 4.15%.

I think this is the 1st time in 2018 when I’m finally beating the SPY ETF, all thanks to the sharp plunge in recent weeks. Sheesh.

Plus I enjoy a nice tailwind as these numbers are all in USD, but the USD has strengthened considerably against the SGD this year, so the gain’s contribution to overall portfolio NAV has been magnified. (I tabulate global portfolio with USD as the base currency for comparison purposes, but overall portfolio NAV is recorded in SGD)

But let’s see how things look like at the end of the year…


The 2nd part of this post is to update the new activities and results of TT Fund, a continuation of the last post: ThumbTack Fund. #$TR!J%@F()*&(*%#!!

And this…. hasn’t been good.

As I’ve said in the last post, my timing here couldn’t be worse. Literally setting up positions the day before the carnage started. Damn. If only my shareholders have been more tardy in paying up for their stake.

It’s only been 3 weeks but….

808) TT Fund.jpg

LOL! That’s right. No error there.

There’s no typo here. Numbers are automatically calculated by Interactive Brokers so no fudging the numbers.

-146.63%?!?!

I better type that out in numbers in case you guys miss the “-“

That’s a NEGATIVE 146.63%!

How does one lose… more than 100%?

LOL, and THIS is an illustration of the perils of using MWR for the short term. Cos it extrapolates the negativity and annualizes it. Ouch.

Now… if I switch to a TWR…. suddenly it looks much more acceptable:

809) TT Fund TWR.jpg

OK, I never thought I’d say a -11.06% is “acceptable”…. but it’s what it is.

It’s still early days, I was unlucky in timing, but it’d sort itself out in the longer term. The gains will stack up with time, so I’m not too worried. The quantum itself is small anyway. Luckily I’ve only deployed about 25% of the TT Fund’s funds.

Plus, in the past week, there are signs of a turnaround as I quickly corrected some of my positions:

810) TT Fund TWR.jpg

I won’t really talk about the massive difference in TWR and MWR here, as it’s been discussed to the death.

Most recently, a reader (Matthew Seah) wrote a comment illustrating the difference, so you guys can go read it if you’re interested. It’s in the comments section on the bar to the right. (https://thumbtackinvestor.wordpress.com/2018/10/04/birth-of-a-new-thumbtack-fund-gfh-fund/#comments)

Little did I know then, that TT Fund would be a fine example itself.

Perhaps it’s not very wise for me to be showing TT Fund’s terrible performance in contrast to my personal US Fund’s. Shareholders may get pissed with me. LOL! I swear TT Fund takes up more of my attention than my personal one!

Anyway, here are the activities of TT Fund in the past 2 weeks:

810) TT Fund.jpg

811) TT Fund.jpg

Yesterday was the 1st day that 2 options got assigned, and another 2 expired. Suddenly, it gets more fun from here every week.

Again, godspeed (to TT Fund).