Analyst Ratings on our Stock Positions – Expected Performance Analysis

Dear LPs:

As stated yesterday, I wanted to share with you an expected analysis for portfolio performance once the analyst expectations for our stock holdings are hit (each between 55% - 90% upside from their current values). The rest of the non-stock holdings' (ETFs, crypto, etc.) target values for this analysis have been kept the same as July (that code was also shared with you). Sharing the code I wrote and the results in the 2 screenshots below :-

As you can see, the expected performance will yield a return of 140%, noting the analyst price targets are markedly lower than my individual price targets for these stocks. Even in that scenario, so long as we just stay the course, we'll make a worthwhile return. 

As of the past 1.5 trading days (until Tuesday early morning), due to the UK government's actions in stabilizing their bond markets and implying that they will control their tightening programs, the Dollar seems to be weakening, which in turn, is pushing some liquidity back into the markets, elevating equities markets worldwide. I expect the US to do the same at some point, and liquidity conditions might improve further. As more liquidity improves, our positions can be off the hook it's on and continue making forward progress. It's that straight-forward. I truly believe we're undergoing a dampening effect due to the Dollar's artificial strength and China's continual insistence on Covid zero, both of which are temporary, which is why I remain so confident. 

However, I'm not suggesting we're off the bottoms just yet or anything like that, and only wanted to provide a glimpse of how the markets react in real-time to liquidity pressures both on the upside and down. Generally, in a market like this, as Barron's reported today per a poll of fund managers, the longer your time horizon, the greater your advantage. We're on the right track given our ~3 year time horizons and although I might've been early, I'm not wrong and know what I am doing. I'm confident of making big gains by simply staying put in the positions I've carefully built over the past 5 months.

I hope this small exercise helps in assuaging any concerns of yours in a tiny way. I'll be in touch with more market action as we hopefully continue to climb out of this in the coming days and weeks.

P.S: Below is a snapshot of where we were on September 12, when we were within ~8% of breaking even with profits on the non-crypto side (only losses were due to crypto). The following day inflation numbers came out hotter than expected and the markets fearing a liquidity crunch due to extreme Fed hikes started dumping equities. That happened very quickly leading to our accumulated paper losses until the past couple of days. As I've suggested many times prior, when markets go down on liquidity concerns, they also climb back up just as quickly once those concerns fade away or there's an intervention by central bank/government. I didn't want to trade these moments although I was fully aware of the short-term pain we'd go through since I'm not a trader plus I didn't want to unnecessarily burden your tax statements for realized gains that would've been achieved on September 12. It's much neater if we simply wait for the storm to pass, both given our time horizon and tax-wise. 

Regards,

Pranjit Kalita
CIO