Thread by @puppyeh1

For the sake of total clarity, this was a JOKE. I was not +850% in 1H...but I appreciate all the (undeserved) 💕

Tbh I'm not really a fan of posting recent, out-of-context PnL. But I am a fan of looking back on past performance and trying to learn the right lessons...

THREAD

https://twitter.com/puppyeh1/status/1410545447127588864

So I'm introducing a new segment, the 'Raper Capital Origin Story', pt1. if this is wildly unpopular it may prove to be part 1/1. Otherwise I will do these occasionally ad hoc.

Let's start at the beginning - 2014. I had just left a HF job (long/short credit), and was in NYC...

...having worked in finance for ~6yrs at the time (and invested PA for 12-13yrs at that point). But this was the first yr i attempted to 'prove' i could make it as a full-time investor.

My initial account was not large (sub 7 figs). Ie I needed to make big bets (fine w me!)...

Here's how I did. +119% total return, 3.6 Sharpe (measured monthly so v small sample). Most all the PnL came from US names, w/ largest contributor $YHOO (will discuss shortly).

This was a 'manna from heaven' type year, esp to start my independent management career...

...in which I had only one losing month and crushed the benchmark despite running ~25-30% net and <100% gross:

There was admittedly a lot of luck involved. But I worked out early the following things.

1) CONCENTRATION. The benefit of managing small $ is you (are forced to) make your bets count. I made 20% on $YHOO stock, and prob ~40% total counting options positions...

2) stick to CORE COMPETENCY: basically all the winners were credit-driven, or special situation-driven strategies.

$YHOO was a SoTP argument pre $BABA IPO, with a strong and immediate hard catalyst (the IPO + capital return). The position itself grew out of my experience in 🇯🇵

where Softbank, $9984.T, had the similar $BABA catalyst but where the lookthrough valuation was way way higher as Asia-based investors realized what $BABA was worth.

This created a hugely asymmetric bet (core $YHOO at a huge negative implied value) w a hard catalyst...

...but the other big winners were quasi-credit trades too. $AAL had gone through B/K a year or so ago and the equity was simply repricing back to comps after B/K stink rolled off. And $MU I got lucky w the cycle but they were still digesting the huge accretion from the Elpida...

...purchase out of B/K (again another Japan learning).

$5184.T, Nichirin - a Japanese auto parts name - was really cheap and in the right kind of market. There was no special sauce there. and $GLN.TO (Glentel) got taken out at a big premium, again some 'found' alpha...

...but as I said it was a specially blessed kind of year. Even the shorts made money - 3 of the top 10 contributors were shorts to zero or close enough ($ARO, $LOOK, $GTAT). Credit shorts actually worked! Ancient history indeed...

So 2014 was a very blessed year and I managed to get off the ground running on a high. I also started publishing my ideas online at this time. Many of these winners I actually wrote up, on Seeking Alpha (in case anyone is interested in reading now, I doubt it)...

...in other words I started to develop my written voice and began to appreciate the benefit of soliciting feedback from the broader community on my investing ideas.

My 2014 performance - such as it was - gave me the confidence to continue pursuing investing full time 🤘🤘

Tune in next time for 2015 - things got more difficult! 🙏🙏