Position Updates (Long Overdue!)
Proving that when you follow the people, time is on your side
Hello OpTrackers,
Apologies for the hiatus, but sometimes real life gets in the way! But we are back - and the bright side is taking an unfortunate leave of absence gives us a chance to look at what happens over a multi-month period of inattentiveness when your initial decisions were made by shorting bad people and getting long what seem to be good stewards of capital
Here’s a quick summary of where we (illustratively) stand today:
We were previously batting about 90% on an absolute basis, 100% on an alpha basis, and I mentioned at the time I thought that was unsustainable. And here we are a few months later and the batting average has stepped down to 79% on an absolute basis and 93% on an alpha basis. So that proved to be true, though I am still very happy with that hit rate.
Perhaps more importantly, because the of a few implosions on the short side and the fact that on the positions where we are down we are only down a little, our slugging ratio has stepped up from 1.9x to 4.5x, more an offsetting the decline in the batting average.
This seems like a good time to ask you to subscribe and share this post if you know anyone who might be interesting in a these kinds of results!
So far, it appears that by following the people, you can build somewhat of a set-and-forget portfolio.
Position Commentary/Updates
Given the long period between updates and some implosions on the short side of the portfolio as well as moves on the long side, I am taking the opportunity to update a few positions.
Fisker (FSR / FSRN): Fisker is circling the drain and will likely go through a Chapter 11 or Chapter 7 bankruptcy. The stock is now down >98% since I wrote it up and the cost to borrow under my method for tracking is really high, so I can taking the money and running here.
Vaxxinity (VAXX): Vaxxinity is down almost 90% since I wrote it up and I will be claiming the victory on this one was well. If the owners can find a way to salvage the equity, maybe we will get another bite at this apple.
Maui Land & Pineapple (MLP): Absolutely nothing has happened at this company, but it has generated 20% alpha in a very short period of time. Maybe it’s because everyone is worried about inflation and land does well during inflationary periods. Regardless, this is an unusual company without the typical compounding dynamics of an operating business with reinvestment opportunities, so I am going to not over stay my welcome and maybe we get a shot at re-entering lower.
Outside of those three investments, we unfortunately missed a chance to exit LICY much lower and I think there is a little more juice to squeeze out of the others. So we will keep everything else going.
I hope to return to regularly publishing new ideas each week and updates on returns each month. See you next time!
Again, if you know anyone who might be interested in a new source of substantial alpha on the both the long and short side, please smash the share button below :) I am still early days and every incremental subscriber means the world to us.
Until next time!
Please Note: I track these as a theoretical exercise and anything written on this blog should not be used as investment advice. Please consult a financial advisor before investing a dime of your own money. Additionally, these returns don’t perfectly capture borrow costs (or capture other potential offsets to returns at all) and realized returns may differ materially from the results shown here.