Birkoa Newsletter 41 (mid-December '23 updates)
Hello Birkoa LPs, prospective clients, and well-wishers,
I'm sending a brief mid-month update on our fund's status and progress. Expect a comprehensive letter at the month's end, capping off what we anticipate to be a highly successful year for our fund and investors.
November was fruitful, yielding a 26% net gain in fees. This momentum has carried into December, with a mid-month increase of over 9%, placing us at a comfortable 40% year-to-date (YTD) growth. We're outperforming nearly all major global indices this year, and I foresee this trend continuing. Since our inception in May '22, our earliest investors are currently up >20%, with some of our subsequent investors up >40%. Once again, we're continuously and comfortably beating most if not all major market indices across all the time horizons when new capital has been deployed.
A key update I wish to share involves recent monetary policy shifts in the United States. The Federal Reserve's unexpected dovish stance hints at deeper rate cuts in 2024, a bullish signal for our U.S. tech and AI holdings. Despite our impressive recent performance, we're still in the early stages of growth in this sector, as well as in the emerging bull market for crypto and blockchain, fueled further by anticipated rate cuts.
This week also marked a significant shift in the prolonged strength of the U.S. Dollar, a factor I've repeatedly identified as artificially linking various assets. With the Dollar's weakening expected to continue into the next year, we're observing a rise in previously unproductive assets like metals, commodities, and regional banks, broadening our portfolio's rally.
Our China investments, though currently underperforming, only account for a 1.5% net loss in our portfolio. This allows us the flexibility to wait for their inevitable rally.
With these developments, the environment is ideal for deploying new capital. The easing of Fed's tightening cycle and the weakening Dollar have unshackled our portfolio's potential.
P.S.: As mentioned in November's newsletter, I've secured a hedge for our portfolio using a short-term options strategy on the VIX (Volatility Index a.k.a the "Wall Street fear gauge"). This strategy protects us from market volatility while limiting potential losses, given the VIX's historically low levels. It serves as a buffer in rising markets (e.g., last week's gain was 6% instead of 7%) and a safeguard in declining markets. Continuous monitoring and strategic options-based hedges will remain a focus in our future maneuvers.
I look forward to keeping you informed and maximizing our fund's performance.
Sincerely,
Pranjit Kalita
Chief Investment Officer