Wobble Profile picture
23 Nov, 20 tweets, 5 min read
Amazed how many @hkuppy fans are unaware of his public co, $YAK.v / $MNGFF. It's up ~700% in the past year, and I believe its best days are ahead. IMO, it's the best way to invest in Kuppy and his investing skills, w/ cheap valuation, embedded options & huge alignment to 👢.
🧵👇
First, background. Kuppy launched $YAK.v in 2011 as a huge bullish bet on Mongolia's future. Commodities were 🚀ing, and with Mongolia's huge natural resources, Mongolia was on 🛤️for ridiculous growth. $YAK.v dug in and looked to throw a saddle on every growth opp it could,
primarily purchasing prime real estate in Mongolia's capital and launching a commercial insurance co. $YAK.v had a thrilling start out the gates.

To say the trade then went sideways would be an understatement. Mongolia basically politically & economically shot itself in
the foot, then the stomach, then the face. Its currency plummeted 80% in 4 years, FDI plunged from over $4B to under $100M, and business disputes halted major mining projects. For years, it has been nuclear winter for $YAK.v, with $YAK.v pulling every lever and trick imaginable
to survive. Their performance under the circumstances was extraordinary, but significant capital loss could not be prevented. Although insiders did not sell (incl @hkuppy w/ his ~20% stake), the public bailed and left $YAK.v for dead.

But dead it was not. Kuppy took over as CEO,
$YAK.v sold its insurance company, actively sold off properties, and over the last several years slowed its bleeding to a drip, thanks in large part to having what is surely the most capable business team of any foreign company in Mongolia.

$YAK.v then plotted its comeback,
accelerating real estate sales and putting the co's liquid assets under Kuppy's investment management and aggressively buying back stock. Bottoming during the Covid Crash, Kuppy's investment management mirrored his HF's performance, leading $YAK.v to 6-bag over the past year.
Meanwhile, $YAK.v announced its long-term plan: outside of maintaining its best, core Mongolian assets as appropriate, it would transform into a merchant bank with Kuppy as the capital allocator, investing in public securities while awaiting opportunities to invest in and start
private businesses. $YAK.v also announced its first venture in this regard, @KEDM_COM , an event-driven investment service. In its most recent MD&A, $YAK.v reiterated this vision with palpable excitement.
Investing in $YAK.v today is investing in that vision at the ground floor. In my view, buying today gets you the following:
1⃣ $YAK.v at roughly book value, which stood at $1.36 at the end of September with roughly 2/3 being cash & securities and the rest consisting of property & equipment in Mongolia with negligible debt. $YAK's securities portfolio enjoys returns that closely
follow Kuppy's HF performance (meaning also that the $YAK.v securities portfolio is probably up another 10+% in October) without a minimum or HF fees. The Mongolia property values come from a recent, conservative appraisal.
2⃣ Despite being valued at roughly book value, a company that is growing, not shrinking. KEDM has been growing like gangbusters and currently has over $1M in unearned revenue, with all indications suggesting that it will be enough to make $YAK.v CF+ going forward.
3⃣ A call option on the growth prospects of Mongolia. I won't pretend to know what those are, but they've probably bottomed with reason for optimism, especially in any kind of commodity upswing. Kuppy has repeatedly commented on how talented $YAK.v's Mongolian team is and what a
shame it is that they don't have an opportunity to flex. (Among other things, they operate the only modern, western-style real estate agency in Mongolia. Unfortunately, real estate deals are few and far between.) They are sitting in Mongolia like a business navy seal team
waiting for something to pop off. If Mongolia ever starts taking off again, it's hard to put a top estimate on how much value $YAK.v could capture.
4⃣ A call option on Kuppy. Kuppy is plainly in the prime of his career with more astounding investment returns, network strength, and media attention than ever, operating in a macro era he was seemingly born to navigate. Kuppy's future looks bright, and $YAK.v is your Dolorian.
5⃣ More insider alignment than you could hope for. Through all the horrors of $YAK.v's past, insiders held strong, and they have been vigorously adding to their stacks while $YAK.v simultaneously ramped up buyback. Just last month, Kuppy brought his ownership up to ~24%.
As Kuppy said in the most recent MD&A in uncharacteristically upbeat tone for $YAK.v (which has never hid its difficulties from investors), "The last decade has been painful and frustrating, I am hopeful
that the coming decade will be exciting and prosperous."
Put differently,
For those interested in more info, @roojoo3 's recent SA article is a good resource with some more specific info on $YAK's assets.

seekingalpha.com/article/447077…

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