Portfolio going into Q4
So many missed chances; YTD +44.89%
Q3 was more or less a wash - ended the Quarter up 1.55% for a YTD performance of 44.89%. It could have been much better had I done all the things I wanted to do - but I really struggled to liquidate positions to free up the cash needed for all the ideas I wanted to pursue. I am not happy with my process recently.
My main struggle this Quarter was with selling. I am on principle a big proponent of always being fully invested but I have to admit that this Quarter, it really hurt me. I painfully realised the drawback of being fully invested in many illiquid names that are 20-40% off their peak:
First, it’s hard to sell something down 20 or 30 in the first place. Realising a loss never feels good. Second, having to sell something illiquid often means having to hit the bid, which usually comes with another -3% penalty on the day - which I find really hard to do.
So I ended up sitting in inertia for most of the time, not selling, not buying. And that cost me dearly. I don’t want to bore you with listing all the stocks I was tempted to go long this Quarter, but let me give you three brief examples:
I was very, very tempted to put on a 5% PDD 0.00%↑ position at $90 and additionally purchase some $150 Jan 2026 calls. I have always found the notion that China is uninvestable silly (there is a price for everything) and felt that the long bear market in China was likely to end soonish. The 50% PDD 0.00%↑ sell-off to 7x earnings after the last ER provided an incredibly opportunity to go long a company with absolutely insane metrics in a market that was smashed to the absolute rock bottom with terrible sentiment. It just seemed like a no-brainer bet with an insanely skewed risk/reward. I really wanted to put this on but during the days where the opportunity was available, failed to make myself sell stuff…. Well… a few weeks later and PDD 0.00%↑ is up 50% of where I wanted to buy it.
On August 20th, I looked at SDIG 0.00%↑ after having seen it in the fantastic Toffcap Monday Monitor. I decided that based on the available evidence it was very likely that it would be sold in the near term at a hefty premium and I resolved to add it to the portfolio. But once again I took too long to decide how to free up the cash. On August 21st, a few hours later, pre-market, the stock surged more than 100% - the offer had arrived.
In September the most annoying example happened: A twitter friend pitched me FTCI 0.00%↑ when it was 22-23 cents. We exchanged DMs for 2 days and I was finally ready to buy. In the last few minutes of trading on Sep 10th I liquidated KSPI 0.00%↑ to free up the cash, to buy FTCI on the next day. What happens next? After the market closed on Sep 10th, FTCI 0.00%↑ published a news release that sent the stock up 100%. Of course, I didn’t buy after that pop. Meanwhile the stock ran up some more, so that it’s now up 200%…
So this is how my Quarter went guys. Just writing about these 3 examples and re-living them this way annoys the living shit out of me. Unfortunately there were more (though these were the worst). The only silver lining is that I coincidentally managed to sell KSPI 0.00%↑ this way before the short attack hit. That saved me a good chunk of performance, so it wasn’t all bad, I guess.
One last word on the portfolio: I am not happy with the composition right now. There are a few turds in there that I can’t wait to drop (I am waiting for a pop to sell into), and others that I want to be much larger. Anyways, here it is:
Hope you had a less frustrating Q3.
Best,
Friendly