Prepare For "The Great Macro Dreamscape": Harris Kupperman
"I’ve spent four years slamming the accelerator, and I feel like I’ve taken this economic cycle as far as it can go. Now, it’s time for the markets to re-set and give me new opportunities."
One of my favorite investors that I love reading and following, Harris Kupperman, has offered up his latest thoughts on the market this week.
Harris is the founder of Praetorian Capital, a hedge fund focused on using macro trends to guide stock selection.
Harris is one of my favorite follows and I find his opinions - especially on macro and commodities - to be extremely resourceful. I’m certain my readers will find the same.
Please be sure to read both my and Harris’ disclaimers, located at the bottom of this post.
The Culling
I’m known as a hyper-concentrated investor. I take my best ideas, bet them big, and ignore the volatility along the way. While it’s usually my top 5 or so positions that effectively determine my performance results for the year, I also tend to have lots of other positions on the books. These enter the books for a variety of reasons; interesting ‘tracking ideas,’ stocks that moved before I could get a full position, Event-Driven ideas where the event hasn’t yet played out, and all sorts of other assorted tickers. I also end up with a healthy collection of inflection ideas where the inflection always seems to be postponed another quarter, or the strength of the inflection is feeble, but it may accelerate in the future.
For some reason, these things seem to accumulate like cobwebs in the attic. While the positions are individually rarely more than a few hundred basis points, in aggregate, they end up tying up a lot of capital. More importantly, they clutter my mind and take up time. Why is this thing not inflecting yet? When will this Event-Driven setup finally play out? Let’s get that CEO back on the phone and ask him a third time about a 50bps position. Then, there is always that stock that’s up a few hundred percent, but I only got a starter position, since I was too greedy to pay up 5% when we were buying it—those are the winners that just sit there, mocking me.