Gazprom +34%, Kistos +18.5%: A Look Inside a Real Portfolio

Gazprom, Kistos, and 70% in China: The portfolio that doesn't trinc the Ibex

In October 2020, with half the world still locked down and central banks printing money as if there were no tomorrow, someone decided to publish their portfolio, including entry prices, for anyone to judge. Seven stocks, a weighting in China that they themselves placed around 70%, and a promise: to update it every two months. The strange thing isn't the list. The strange thing is that they kept updating it.

The log starts with an uncomfortable confession: the initial thesis was to expect the drop to continue, and it didn't. 'The decline I thought would continue over time actually reversed, and many things I liked took off.' Hence the shift towards beaten-down assets outside the Ibex's radar.

The portfolio's numbers as of January 1, 2021

The table published that January would be reluctantly signed by any manager: Gazprom was bought on October 30, 2020, at £3.055 and was trading at £4.107 (+34%). Morses went from 36 to 49.35 pence (+37%). Kistos, from £1.408 to £1.635 (+18.5%). Boohoo, from £2.61 to £3.43 (+31.5%).

The defensive stocks did their job without fanfare: British American Tobacco from £24.88 to £27.08 (+9%), Dream International from HK$2.66 to HK$2.81 (+5.5%). And the Chinese stock BABA, the weakest of all, barely a +1.5% from $228. The complete table, with average entry price and stock-by-stock return, is what gives true meaning to the whole.

Kistos, or how to buy a resume instead of a balance sheet

The entry argument wasn't a cheap multiple. It was a man: Andrew Austin, former CEO of RockRose Energy, at the helm of the new company. The presentation was explicit to the point of shamelessness: 'you will have absolutely none of that,' he said, referring to the P/E ratio, debt, and margins.

The author himself referred to the company with a code name, the Falcon. Buying the manager, not the sector. An approach that works as long as the manager is right and doesn't allow for many uncomfortable questions along the way.

The 70% in China and the carnage

With most of the portfolio in Chinese companies, the year was an exercise in resilience. BABA was sold in the after-hours market for about $200 in profit, a modest exit that avoided greater evils. The punishment came from elsewhere: QFIN plummeted after the withdrawal—according to a forum user—of its app from an app store, and it had to be recalled that the fines that scared the market amounted to €70,000 for companies valued at €700 billion.

TIGR, FINV, HUYA, DOYU, MOMO, QIWI. Each name carried its own regulatory risk. The question that loomed was always the same: how much of the decline is noise and how much is the end of a business model.

Safran, or why the short term is an arithmetic trap

Against the temptation of quick trading, the most pedagogical example of the entire series appeared: €10,000 in Safran on June 1, 2007, were worth €51,000 at the end of the period. With a bit of a trick—buying on March 1, 2009, and selling before the pandemic—it would have been €204,000.

The logic of the argument is implacable: those who go long can only lose 100% and multiply many times over; those who go short can only gain 100% and lose several times their investment. The drawback, never openly stated, is that this reasoning requires having picked the right company.

From cheap execution to the Interactive Brokers maze

Half a dozen messages serve to remind us that investing well and executing well are two different trades. Kistos only processed orders at the opening and closing of the session, leaving limit orders hanging with the price already lower. One broker showed prices with a 15-minute delay.

And the most comical episode: an investor who lost their account username and discovered that support in Spanish simply doesn't exist. They resolved it when the browser remembered for them what the contact form couldn't recover.

MoneyMe: 383 million versus the predicted 380 million

The tracking of the Australian finance company MoneyMe led to a lesson on where to look. The key wasn't in profits, but in credit originations, because revenue arrives with a delay. The personal forecast was for 380 million loans generated; the actual figure was 383 million, with year-on-year growth of +384%.

Some argued that, with few shares in circulation and buyers not selling, the stock had to skyrocket. The thesis is coherent. It's also exactly the type of thesis that falls apart as soon as paper appears for sale.

The portfolio moves its base

Towards the end, the pace slowed. Several of the most active names had moved to a messaging server and their own podcast, with programs dedicated to precious metals as a hedge against the printing machine. The original channel was left half-deserted: 'Did you guys move and I didn't notice?' someone asked.

And then, the resurgence. A late message reminding that Kistos was 'very close to ATH' and that there was still time to jump in. The Falcon was still flying.

When this log was peine, the portfolio had seven stocks. At the end of the sample, according to the author, that same Chinese block accounted for about 70% of the total, and the rest had become a story about regulators, brokers, and patience.