"Inflection Investor" Fund Manager Shares His Portfolio Into 2024
Submitted by QTR's Fringe Finance
One of my favorite investors that I love reading and following, Harris Kupperman, has offered up his thoughts on what his next big bet could be.
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. I was excited when he offered up his latest thoughts, published below (slightly edited for grammar, bold emphasis is QTR’s).
Please be sure to read both my and Harris’ disclaimers, located at the bottom of this post
2023 Position Review: Harris Kupperman
It seems that everyone has a blog these days. Once a year, we must stop everything, tally up the scores and see who got it right. Besides, what’s the point of going through all this effort, if you cannot point to the scoreboard, and flaunt it a bit. With that preamble out of the way, let’s dive into the 2023 position review.
Historically, the year-end position review has focused on individual stock tickers, but as noted in the 2022 review, I’ve been writing less about individual tickers and more about themes on these pages. This is partly due to compliance (yeah, everything fun is somehow banned) and partly because themes are usually far more interesting than individual stocks anyway.
Ok, let’s get on with it…
To start with, 2023 was a frustrating year. As an inflection investor, I hope that I’ll have years where my themes just keep trending, and the performance number is impressive—but I know I’ll also have years where the numbers are sort of depressing. I’d say that 2023 came out mid-way between these extremes—effectively a mundane year. This is unusually frustrating as many of my trends (actually) worked quite well from a fundamental standpoint. Regrettably, my stocks refused to respond. That said, 2023 was the year when you either owned MAG7 or you didn’t. Excluding a few quick trades, I wasn’t long MAG7, and was selectively short a few of them at times (unfortunately…).
Oil and Oil Related Positions
Let’s start with the one I got wrong, oil. My conviction that oil would go into the triple digits held back my portfolio all year. I did a lot of fundamental work on this theme, re-did my assumptions a bunch of times, but in the end, I simply got the price of oil wrong.
Fortunately, this didn’t cost me much. That’s because most of my energy positions performed quite well, excluding my 2025 futures calls (still got 2 years left for them to play out), my Brent Oil ETF (BNO – USA) and short-dated futures and options, which I sold for a small loss, and a small-cap energy producer which I have continued to add to as it has leaked lower. Offsetting this, the demand for energy services was quite strong, with particular strength in the demand for offshore equipment. Fortunately, these other positions have more than offset the losses from my direct oil exposures.
I’ve publicly spoken about...(READ THIS FULL ARTICLE HERE).
