ThumbTack Fund Report 2 – Dancing Between The Raindrops

That’s exactly what I’ve been doing in September.

S&P weakened considerably since the inaugural TTF’s 1st report on the 28th Aug:

I’ve managed to dance between the raindrops in the past mth or so, as TTF continued to grow strongly, largely on the backs of just a couple of nicely timed positions.

1 of which is to enter into long positions in BBBY just the week before earnings release:

Time for some numbers:

TTF fund cumulative money weighted return since inception in Feb 2020: +25.66%, YTD returns: +25.45%

Total deposits: USD 165,913.77

Current NAV: USD 194,405.75

Quantum gain: USD 28,491.98

This compares favorably with the 3 benchmarks I use:

I’m pleased with how TTF managed to dance between the raindrops, bucking the trend and adding further gains in a volatile September, from a YTD return of +15.46% to the current +25.45%, adding 9.99% to the returns in September alone.

Since the last report about a mth ago (, SPY has dropped 2.32%, reflecting the correction in tech in September. VT has dropped 1.3% YTD, tracking the decline in S&P.

STI has remained fairly “resilient” by dropping only 0.43% in September, but then again, a -20.85% YTD return is scant comfort. I guess GOT wisdom applies here: “What is dead, may never die!”

TTF’s top 5 generals is a highly coveted list… and truth be told, I’m surprised that I’ve made changes to the 5 names more frequently than I expected to when I started in Feb.


  1. Visa (V)
  2. Broadcom (AVGO)
  3. Bausch Health (BHC)
  4. Tencent (0700)
  5. Agilent Techologies (A)

In TTF Report 1:

  1. Broadcom

2. Bausch Health Companies

3. Frontage Holdings (HK listed)


  1. Broadcom (AVGO)
  2. Bausch Health Companies (BHC)
  3. Frontage Holdings (HK listed)
  4. Mercadolibre Inc (MELI)
  5. Bed Bath & Beyond Inc (BBBY)

This list is highly likely to change again in the coming months, as I’m currently toying with the idea of replacing the newest entrant: BBBY.

With the recent jump in the share price, I’m considering taking profit and replacing it with another heavily knocked down, but displaying strong FCF generation, value play. The DD would take a bit more time though, all this work is messing up my sleep recently.

Of the 5 generals, AVGO, MELI and BBBY are all in the green. BHC and Frontage are still currently net losing positions.

I’ve also started employing some leverage in September, as cash levels dip into negative category. Main reason for that is the MELI position. Based on my entry of USD 1,030 or so, a mere 100 share position would cost USD 103k. I forsee that the leverage would be chipped away though, over the coming months as I churn the premiums on options. Hopefully. Either that or when I divest MELI fully.

Peak to Trough, it’s been a christening experience for my new TTF fund, from a near death experience of almost -50% to the current outperformance of +25%

I’m actually starting to toy with the idea of looking into SG markets for the next general. US is likely to experience greater swings and volatility as we approach the elections. In contrast, SG has already dropped significantly, and perhaps there’d be some value emerging. I haven’t really looked into it, just toying with the idea. 1 minor bug bear is that since I can’t buy SG equities with my IB account, tracking returns would not be automated so that’s making me hesitate.

Finally, I’d end off by giving an update on a previously discussed company: Avenue Therapeutics (ATXI)

I’ve written extensively about the company back in May 2019:

Here we are, 17 months on. ATXI’s share price has appreciated from USD 4.50+ back then, to the current USD 11 or so, which is a massive return for 1.5yrs.

PDUFA date is set at 10th October, which is less than a week away. For the uninitiated, this is the date whereby FDA has to give a reply regarding ATXI’s new drug application (Tramadol given by IV route)

In other words, the investing thesis comes to a head within a week. Sort of anyway (there are several other scenarios that can play out)

I’ve just divested the remaining stake I own at USD 11 and USD 11.15 on Thurs and Fri.

My ATXI stake was mainly held in the main fund, not this new TTF, so it really have much of an impact on the performance of the fund, although yes, TTF did own a small stake of a few thousand shares at 1 point.

If FDA gives the full approval within this coming week, ATXI’s share price is likely to spike up to the takeover price of USD 13.92, which represents a very cool +26.5% gain from the current share price, in a mere 1 week. And since the take over offer includes additional CVS, the share price could even spike yet higher than USD 13.92.

So why divest right now, given that I’ve written extensively about ATXI, and remains pretty confident that IV Tramadol would likely get approval eventually?

Maybe there’s something about a -50% return (back in March/April) that changes your psyche and makes one less willing to make calculated bets. If ATXI doesn’t get approval, the share price would almost certainly tank. It could be a -20%, it could be -30%, it could even be -50%. It depends on the reasons stated in the CRL (the complete response letter is a nice letter FDA sends to the company if they reject the application, detailing the reasons why)

At my divested price, I’ve already collected an over +100% gain (ballpark figures of around 120% or so). It just doesn’t feel right to stick around for a potential 26.5% return. Long time readers would know that I always like to leave something on the table, and leave the party early.

Also, in the midst of updating my DD as I was pondering whether to hold for this critical event or to sell out early, I’ve compared this situation to another similar opioid that got approved just recently:

“Olinvyk, which is approved in adults for the management of acute pain severe enough to require an intravenous opioid analgesic and for whom alternative treatments are inadequate, will be commercially available when the US Drug Enforcement Administration (DEA) issues its controlled substance schedule in around 90 days, the company noted.”

Trevena’s share price soared upon news of approval of Olinvyk. Note that this is a like for like comparison, as Olinvyk is an IV opioid and it’s pretty surprising to me that FDA would approve it in the midst of all the backlash from the opioid crisis in the US. So, on the surface of it, this seems favorable to ATXI’s IV Tramadol, as Tramadol is a schedule II DEA drug and is less addictive than Olinvyk, a full opioid.

In my mind, it’s senseless for FDA to approve Olinvyk (yes, it has other favorable characteristics over other currently used full opioids, which is why FDA approved it.) and not approve Tramadol eventually.

I keep using the word “eventually” cos that’s been playing in my mind. Trevena got the approval in August 2020, but that’s not after a setback in their initial application. When Trevena first applied, they got a rejection (aka CRL) from FDA back in late 2018:

The stated reasons in the CRL?

“Consistent with the discussion at the recent Advisory Committee meeting, FDA has requested additional clinical data on QT prolongation and indicated that the submitted safety database is not of adequate size for the proposed dosing. FDA also requested certain additional nonclinical data and validation reports.”

I’m just concerned that this may happen to ATXI too. I’ve seen and read and re-seen and re-read their clinical trials and published papers, and they don’t seem completely robust.

For example, Trevena submitted 2 RCTs (Randomized controlled trials) as part of it’s application:

1.) Benefit and Risk Evaluation of Biased μ-Receptor Agonist Oliceridine versus Morphine, by lead author Albert Dahan, M.D., Ph.D., Professor of Anesthesiology, Leiden University Medical Center.

2.) Evaluating the Incidence of Opioid-Induced Respiratory Depression Associated with Oliceridine and Morphine as Measured by the Frequency and Average Cumulative Duration of Dosing Interruption in Patients Treated for Acute Postoperative Pain, by lead author Sabry Ayad, M.D., Department of Anesthesiology at Cleveland Clinic.

Each study included a sample size of 790 patients, and yet in it’s CRL in 2018, FDA indicated that “the submitted safety database is not of adequate size for the proposed dosing”.

In contrast, ATXI too, submitted 2 RCTs, with a sample size of just 409 patients.

I’m not saying this is a 100% like for like comparison, as there are so many other factors at play here. For eg, the initial rejection for Trevena could be related to the higher IV dosing levels, and hence the need for a greater sample size. Tramadol also has a longer history, better track record and is more widely used (elsewhere in the world).

Yet, the risks just don’t seem to be able to entice me to wait another week till D day. If FDA asks for some additional information like a simple bioequivalence study to “top up” ATXI’s application, the share price would still tank cos I don’t think the markets understand such technicalities in that great a detail. The headlines would just be brutal.

Anyway, I’m happy with my returns here, and if FDA gives a full approval next week, and I miss out on a massive +26.5% gain, so be it.

I’ve made my bed and I’m gonna lie in it. It wouldn’t really upset me too much.

But if it tanks and I didn’t escape early enough despite doing all that DD and knowing what I know… yeah, that would upset me.

So there. As you can see, the past month has been 1 filled with lots of researching and tinkering around. Like I said, I’m doing a tap dance between the raindrops.

I’m trying to protect my returns from here. I’d be happy to end 2020 with a +25% return, which would be pretty stellar for any new fund’s 1st year. Plus it’s 2020 so anything can happen. Q4 is setting up to be highly volatile and crazy, and my main focus is on defence, not to try to find the next shooting star. (OK, poor analogy here. Shooting stars are falling meteorites so it comes down, not up).

Anyway, that’s all for TTF’s 2nd report. I’d be happy to share in greater detail, my updated ATXI research and/or other related comparisons if anyone wants it, just drop me a mail.

Stay safe.

ThumbTack Fund Report 1 – Tough Times Don’t Last, But Tough Funds Do

In early Feb this year, I wrote that I’ve set up a new, much smaller fund to trial a highly concentrated approach with only 5 core holdings:

TTI’s Top 5 Generals

Since then, that’s really been my key focus and the past 7mths’ journey has been nothing short of volatile. This post would be basically the 1st report (generated by InteractiveBrokers) about the fund performance.

Over time, I think this new fund and concentrated approach will be my key focus, and likely form the bulk of my portfolio in future.

Macro View

Having been cautious about this recovery, I’ve had a substantial part of my capital undeployed whilst the indices made new highs. The capital ain’t exactly doing nothing though, as I needed them to back up option positions so in a way, they are generating yield for me.

We now see 2nd waves of Covid happening in most places around the globe, yet the markets continue churning upwards (save for the past 2 days last week). It’s like the world’s gotten tired of combating this virus, and am just literally, letting nature take it’s course.

In my research, I found that the best explanation to make any sense out of this disconnect between the real economy and the stock market, comes from Bill Miller’s Q2 fund market letter:

Bill Miller 2Q 2020 Market Letter

“Let’s go back to this idea that stocks at current levels are “disconnected” from the real economy and that presents a problem that stands in need of correcting.

In order to say stocks are “disconnected,” one needs to have some idea of what the connection is between the market and the economy. The belief appears to be that stocks go up when earnings and the economy are going up and they go down when the economy is doing the same.

So, in short, stocks and the economy are positively correlated. The problem with that view is that there is no evidence at all to support it, as a few minutes research demonstrates.

The correlation coefficient of stocks to annual economic growth from 1930 through 2019 is .09, that is, no meaningful correlation at all. For rolling 10-year periods over the same time span, it is slightly negative.

I am reminded of the quote of the now mostly forgotten British poet and classicist A.E. Housman, who likewise was confronted with a belief that had no basis. Housman said, “Three minutes’ thought would suffice to find this out; but thought is irksome and three minutes is a long time.””

IMO though, we are surely due for some sort of correction anytime now, and whilst I’ve no visibility regarding the exact depth or severity of the correction, the timing of which certainly can’t be too far away.

But then again, 3 mths ago, I didn’t think the markets would make new highs this year either.

Portfolio Performance

As stated in Feb, I started building the portfolio in just 5 names:

“Without further ado… here’s my 1st team that’s going to play against SPY:

  1. Visa (V)
  2. Broadcom (AVGO)
  3. Bausch Health (BHC)
  4. Tencent (0700)
  5. Agilent Techologies (A)”

The timing couldn’t have been worse.

I entered positions for this new fund in early – mid Feb, exactly 1-2 weeks before the carnage of Covid lockdowns and stock market plunges occurred.

942) TTF report 1

As seen above, the cumulative return plunged literally right after the fund started, and at it’s worst in March, I was literally faced with a -50% return within less than a month!

Talk about a nightmare start!

I’ve never even had a -50% within a year before, so a -50% within a mth was really a gut wrenching blow then.

Still, fortunately, this was really a small fund then, and the fall may be drastic, but quantum wise, it wasn’t really devastating.

Having already deployed into my top 5 positions right before the plunge, the fund had little funds to deploy further. Still, I did continue to add to the positions as much as I could, mainly utilizing premiums from writing puts.

The subsequent recovery was just as pronounced and sharp: 6 months on, the YTD fund performance now sits pretty at +15.46%.

Total capital injected into the fund: USD 160,599.40

Current fund NAV: USD 176,899.05

944) TTF report 1

Evidently… Feb/Mar was not so fun for me.

I did consider “cutting losses” early on, but the fall was so dramatic that just delaying for a couple of days meant that the portfolio was already down double digit percentages.

As I’ve said, it did help a lot that the quantum wasn’t huge, so it didn’t bother me that much. By the end of March, TT Fund was way way way under performing the other indices by a mile, even the <gasp!> perennially lethargic STI.

IB allows me to set 3 indices as benchmarks, so I’ve chosen SPY, VT and STI as competitors, as they reflect the US markets, World markets and SG market respectively.

I’m pretty pleased with a +15.46% return YTD, having stuck to my guns with the core positions. 

I’m also reminded of Howard Marks’ saying: “You can’t have outperformance without taking on the risk of underperformance”.

945) TTF report 1

I like these reports that IB generates for me, largely because they allow me to reflect on past activities and review to find out what works and what doesn’t, and whether I’ve stuck to what I said I’d stick to when the shit hits the fan.

This chart is particularly instructive, as it shows the relatively large proportion of portfolio in equities and small cash holdings in March 2020. Bear in mind that this large position size in equities in March 2020 was in the context of falling share prices across the board. In other words, just by doing nothing, the proportion of the equities (Blue bar) with regard to portfolio size, drops every day, and accordingly, the proportion of cash holdings (Green bar) with regard to overall portfolio size, increases.

946) TTF report 1

So it’s been 1 helluva crazy ride. From the hells of March, it was really only in June 2020 that the 1st green shoots appeared.

What a reversal.

What’s Next?

I’ve previously already briefly written about the performance of the top 5 generals (post-March carnage):

“Never Let A Good Crisis Go To Waste”

Out of the top 5 generals, I currently only hold direct equity stakes in Broadcom (AVGO) and Bausch Health Companies (BHC)

I’ve taken profit in Visa (V), Tencent (700) and Agilent (A), although I am still long in the form of having written puts on all 3 companies.

Have I taken profit too early? Most probably. Certainly so for Tencent. But that’s ok. I’m just kinda relieved to be taking profits off the table after March’s mother of all drop.

Tough times indeed don’t last, but oh boy, they can be soooo painful when you’re in it.

Currently, the top 5 generals portfolio really only holds direct equity stakes in 3 companies:


Bausch Health Companies

Frontage Holdings (HK listed)

Frontage Holdings is a HK listed contract research organization (CRO), operating Frontage Laboratories. I’ve started accumulating it’s shares directly and intend to hold for the forseeable future.

Last earnings release showed that their Chinese operations were impacted by the Covid lockdowns, impacting on the bottomline.

They still managed to eek out a 2% topline growth though, and future contracted revenue is extremely promising, growing over 60% yoy. My investing thesis here is pretty straightforward: The company has made several acquisitions to expand their overall capabilities. Their US clients are mostly institutions and big pharma that do not switch CROs easily after accreditation. This is a long term secular growth trend as all the big pharma companies continue to cut their clinical teams, and outsource actual data gathering and research functions to specialized CROs.

With their acquisitions, Frontage is poised to capture more and more business. I’ve taken small profits in Frontage last week, but that was really more for portfolio adjustments. I’d continue building up this position over the next 6 months, prior to the next earnings release.

With the spike in volatility last week, I’ve also re-started shorting volatility by selling far OTM naked calls on VXX.

I’ve also started DD on a new company, and will look to add to that in the coming weeks if things pan out. Although having started with 5 names, I’m happy to hold only these 3 currently and am not in a rush to add more.

Anyway, with a fund size of just under USD 180k, it doesn’t make sense to diversify too much.


I’d add a little footnote here regarding property. As mentioned in earlier posts, I’ve also bought another property just earlier this year, in Jan.

Again, the timing COULDN’T HAVE BEEN WORSE.

Like serious, wth is wrong with lady luck?!

She needs to be a tad more fair. Just throw something my way once in a while can?

Having said that, thus far at least, SG property prices have held up rather well. Transaction volumes have gone UP instead, in fact.

The Covid effect on the rental market is a lot more obvious though. This is definitely a renter’s market right now, and they have been driving a hard bargain.

I’m somewhat glad to have finally tied down a 2 yr contract to rent out my previous unit, although rent has been knocked down substantially. I consider myself fortunate though, as I’ve managed to get tenants in a relatively short time frame, without much of a break in between shifting out and renting out.

I’d add that in such a market, landlords can give themselves a competitive edge by offering stuff other than cutting rent: sprucing up the property with a new coat of paint for example, or providing new gear like a new fridge or dryer or TV etc. These don’t really cost that much when amortized over the duration of the lease, and there’s usually some residual value left anyway.

Although I consider it bad timing to have committed to a property purchase right before Covid struck, in reality, thus far at least, property prices did not budge much. At least in SG.

There has been other inconveniences and related disruptions though, as the renovations took much longer than expected (due to the lockdown), and the subsequent shifting too was a hassle. I did get some very good movers though, who were not only professional; their prices were also reasonable and they were errr “chin-chye”, helping to move additional small items that were not in the initial quote.

Their reviews online were also very good, so it’s not just me who’s impressed.

(This is not a sponsored post ok, I’m just giving good service some milege)

In the long run, from a macro perspective, I consider property a vital portion of my overall portfolio, as a hedge against inflation and the constant money printing by the Fed. They can print to high heavens, and they will… but they can’t print a single property into existence.

I’d end this 1st TT fund report here. 

Good luck for the rest of 2020.