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More from @bauhiniacapital

14 Nov
@therobotjames For the sake of playing devil's advocate, I will take the other side of that, "for most" for a couple of reasons.

I will start with the following assumptions (which may be wrong-footed, but their mine):
a) there is no tax differential between high turnover and low turnover
@therobotjames b) we are talking institutional - comms are 2-5bp, cost structure in mgmt fees is, say 15-20bp/yr
c) end investors WANT active share risk which is why they pay you the big bucks to provide active risk.
@therobotjames What IS certain in this case is that
a) you are in the active mgmt business so it is CERTAIN you have inherent expectations of creating positive alpha vs benchmark. You may not succeed every week, but on average, that's your business model.
b) Moving from say 4.5bp/yr comm
Read 27 tweets
14 Nov
Weirdest thing, but getting less weird as time goes on.

Just had the third kingfisher (trying to figure out what it is - there are more different kingfishers than I knew) fly inside in the past 6 weeks.

Cute little buggers.

Got the cat ALL excited.
Kingfishers are year-round, but as we approach winter, LOTS more migratory birds show up. The striated heron we had standing on a railing 1 meter outside my front door yesterday when I woke up is non-migratory but I think came when his friends started showing up 2-3wks ago.
Over the winter, we get about a half dozen types of heron/egret, some cormorants, a number of other shore birds as well as a variety of songbirds. Going to try to attract more songbirds this year. The seabirds can stay further away. Pretty, sure, but cleaning up after them? Nah.
Read 4 tweets
13 Nov
An interesting 🧵.

The process described is commendable. The optimisation tweaks (i.e. lower turnover) are debatable.

In my experience if one has significant conviction in single name alpha and conviction in the sizing methodology, higher turnover can lead to significant value
add as long as one also has an understanding of the behavioral drivers of the alpha. If one has "fundamental driver" alpha, that will lead to longer horizons, and less confidence in one's ability to harvest cross-position noise. If one has confidence in non-LT fundamental driver
alpha (could be valuation, style bias, investor class bias, intracorrelation clusters, flows analysis) then alpha can be harvested over a much shorter horizon, and comms are low enough that the increase in Sharpe from changes in weighting will offset those cleanly.
Read 7 tweets
11 Nov
Brief thread on Evergrande:

Great article. Lots of color.

This is playing out very much as one would have thought (and did) in summer.…
The government has been insisting on a "market-oriented approach" which is a signal they won't publicly bail out the company's capital providers.

In Jully the govt charged the Guangzhou govt with "coordinating" the efforts between creditors and suppliers and the company.
In early August, the Guangzhou intermediate court was charged with being the hub for all debt-related cases against Evergrande.
Read 14 tweets
9 Nov
Holy smokes.

There was a merger vote at an EGM 12 days ago in Japan. The third largest shareholder, who had made an earlier competing takeover proposal (better for the co and shareholders, but not mgmt) objected, as did others.

It passed.

It needed 66.67%. It "just passed."
It was so close it had to go to marksheet voting on the spot.

Meeting ended 1:40pm. Then vote.

Chamber closed at 2 to reconvene at 3.

Vote counted at 2:50. Inspector General of the EGM gets the tally. Tells chairman.

Chairman of the meeting delays restart 'just to be sure'
At 4:10pm, Chairman walks in and says "it passed, by a small margin."

Done. dusted.

Usually, the result is published by the company in a regulatory filing within 1bd, sometimes same day. This took 7 days. When it came out, it was 66.68%.

Remember it needed 66.67%.
Read 8 tweets
9 Nov
A month later and there is more news coming out.
Earlier in the thread I noted Oasis PR of 4 October, after Japan Catalyst PR on 24 Sep and Silchester on 27 Sep; Orbis followed on 7 Oct

Japan Catalyst:…

Silchester: apparently on BBG but I can't find elsewhere now

Yesterday one activist set up a website, basically acting as a proxy for the Special Committee of NIPPO, saying that NIPPO would welcome alternative over-bidders to the ENEOS/GS deal.

That's fun.

That's the first time I have seen that.…
Read 17 tweets

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