Kuppy on Inflation

[MattR]

14 hours ago, gfp said:

He didn't really, but his fund had a drawdown

 

His partners yanked the money out and it was only through big wrestling that he convinced them to stay on for one more year, in which he had a good result. 

If the partners yank their capital because of the drawdowns, your fund has blown up. 

[coc]

Kuppy blew up on junior gold miners in Canada. It wasn't like Munger where his Blue Chip (now BRK) got marked down in a massive bear market for small caps (-80%) and then became a legendarily good investment for the next 50 years. The money was gone at Praetorian.

 

Then the MGG blowup.

 

He's doing better now clearly. 

Edited January 24 by coc

[Gmthebeau]

1 hour ago, coc said:

Kuppy blew up on junior gold miners in Canada. It wasn't like Munger where his Blue Chip (now BRK) got marked down in a massive bear market for small caps (-80%) and then became a legendarily good investment for the next 50 years. The money was gone at Praetorian.

 

Then the MGG blowup.

 

He's doing better now clearly. 

 

There are so many mining scams in Canada and around the world.  I remember a good friend of mine getting sucked into Cal-graphite decades ago, which was a Canadian mining company that was going to rule the graphite industry.  I figure it's about time for that scam to come back around soon since most people have forgotten about it.

[gfp]

Man, looking back at the holdings he had before he closed down the first version of Praetorian, I haven't found a single holding that is even still publicly listed

 

International Monetary Systems, Ltd

International Commercial Television Inc

Bingo.com Ltd

Timberline Resources Group (still public at .047/share)

DAC Technologies Group International, Inc

 

There are no extra points awarded for degree of difficulty or obscurity in investing.  Hopefully that is the lesson he learned from the first go round.  He still dabbles in little shitcos like Surgepays, which isn't going anywhere long term but is scrappy and trying to exploit some government subsidy for poor people to get online on a cheap tablet.  Praetorian's SURG position reminds me of his old style.  (and I would be surprised if it still listed 10 years from now, much like the names above)

Edited January 24 by gfp

[gfp]

Kuppy's 6/30 portfolio - probably a decent cash position as well.  I would think this fund has "money weighted return" problems written all over it.  The performance was on a smaller capital base and then it grew to over $365 million and there ain't a lot of inflecting going on.

 

https://www.sec.gov/Archives/edgar/data/1949877/000194987724000012/xslForm13F_X02/ppr_2024q2.xml

[UK]

https://13f.info/13f/000194987724000012/compare/000194987724000011

 

Also some recent 'culling' on display:)

[sleepydragon]

who is this Kuppy guy? why everyone seems talking about him/refer to him on twitter?

[gfp]

16 minutes ago, sleepydragon said:

who is this Kuppy guy? why everyone seems talking about him/refer to him on twitter?

he does a lot of social media and podcasts. Runs a hedge fund, maybe $360 million AUM?  He owns St Joe stock. Tulane undergrad 

[Paarslaars]

Praetorian Capital is a hedge fund managed by Harris “Kuppy” Kupperman dedicated to seeking non-correlated, asymmetric returns in a benchmarked world. The actively-managed strategy seeks absolute returns through highly-concentrated investments exhibiting inflecting secular or cyclical tailwinds, and Event-Driven special situations.

[John Hjorth]

26 minutes ago, gfp said:

he does a lot of social media and podcasts. Runs a hedge fund, maybe $360 million AUM?  He owns St Joe stock. Tulane undergrad 

 

I think maybe you forgot Kuppys involvement in Sark Property Company as anchor investor. [A mini Joe?]

[Kuhndan]

I don’t know, having a guy named Kuppy managing my money, just doesn’t feel right.

[gfp]

44 minutes ago, John Hjorth said:

 

I think maybe you forgot Kuppys involvement in Sark Property Company as anchor investor. [A mini Joe?]

 

I don't know anything about that.  I'm all in on Ulaanbaatar office buildings waiting for the inflection

[UK]

Since WB has closed his funds years ago, I am not giving my money for anyone else to manage:). But he (Kuppy) seems sometimes to have very high conviction on things and usually swings quite big. I find some of his thougts and ideas very interesting and with high variant perception. I like his thesis on JOE:). At the same time, sometimes I do not understand his writings at all, especially the macro/monetary/commodity scarcity or general "impeding doom" related. But it is not for me to understand everything and nobody is perfect, but I like to follow him.

 

Edited August 16 by UK

[Morgan]

IIRC, Mongolia Growth Group raised $200m to invest in Mongolian real estate with the idea that values would increase similarly to values in Hong Kong. This is such a fundamentally bad thesis. Hong Kong is very land constrained while Mongolia is just open space forever.
 

Furthermore, the real estate portfolio, with no debt, still was losing money. This is totally crazy. Their expenses were out of control. 

 

Then he created an insurance company inside of Mongolian Growth Group which never made any money. 
 

The only reason the stock has gone up that I’m aware of is because securities inside company increased in value (I will give him some credit on that), not from anything related to operations of the company. 

[Spekulatius]

Worth keeping track of Kuppy for original ideas, imo. I do think he is going to blow up again. Swinging big with other people’s money makes perfect sense as well, from his perspective.

[Morgan]

2 hours ago, Spekulatius said:

Worth keeping track of Kuppy for original ideas, imo. I do think he is going to blow up again. Swinging big with other people’s money makes perfect sense as well, from his perspective.

Doesn’t he have any morals? How can he sleep knowing he’s taking such big risks with other people’s money? It is very reckless. It’s more unethical because he tries to hide his blowups. 

[Gregmal]

Idk but I get a totally different vibe from him when I talk to him on a personal level than the public podcast and Twitter persona. Take it all with a grain of salt of course.

 

I generally don’t like sharing personal convos, so I won’t in detail, but to his defense, he’s been accused of being a pumper, yet held onto a lot of stuff long term that I would’ve absolutely expected him to dump or at least trade. The AMRK position, JOE with its obvious trading range, VAL….which is wholly consistent with everything he says. In order for him to “blow up”, which of these are blowing up, and how? Given the balance sheets are pristine and they do have tailwinds? 
 

Do I think he’s unique? Sure. Do I think he says some wonky stuff? Sure. So does anyone who’s honest. But I don’t get the hate. He’s got one of the highest level work/life balances I’ve ever seen in a guy. He busts his ass and is building a hell of a fund biz for himself. He enjoys life on his own terms. He’s brutally honest about his returns and future volatility parameters. So I don’t get the fuss.

 

 

[gfp]

39 minutes ago, Gregmal said:

Idk but I get a totally different vibe from him when I talk to him on a personal level than the public podcast and Twitter persona. Take it all with a grain of salt of course.

 

I generally don’t like sharing personal convos, so I won’t in detail, but to his defense, he’s been accused of being a pumper, yet held onto a lot of stuff long term that I would’ve absolutely expected him to dump or at least trade. The AMRK position, JOE with its obvious trading range, VAL….which is wholly consistent with everything he says. In order for him to “blow up”, which of these are blowing up, and how? Given the balance sheets are pristine and they do have tailwinds? 
 

Do I think he’s unique? Sure. Do I think he says some wonky stuff? Sure. So does anyone who’s honest. But I don’t get the hate. He’s got one of the highest level work/life balances I’ve ever seen in a guy. He busts his ass and is building a hell of a fund biz for himself. He enjoys life on his own terms. He’s brutally honest about his returns and future volatility parameters. So I don’t get the fuss.

 

 

 

Yeah, I agree with most of that.  I am actually kind of surprised he hasn't sold out of St. Joe so that shows a lot of patience.  He has increased the size of his fund without really changing the St. Joe position size, so it has become less important.  I think he is more humble in person than he pretends to be when he is dropping a million fund-bro buzzwords online.  Blowing up several times will do that.

 

He isn't taking a ton of risk with other people's money at the moment (that I know if) - It actually seems like he is sort of short on good ideas and holding some cash.  None of the positions are very large.  I guess the Uranium and Tidewater/VAL combo would be the only concentrated exposures.  I don't agree that AMRK is a good way to express a bullish view on gold but I am not a big gold bull.  I agree with him that miners are a horrible way to "play" a gold move.  He knows from experience because he invested in a lot of obscure pink sheet, microchip foreign securities and junior miners in the past.  Almost all don't exist any more.

 

As they say - there are no extra points awarded in this game for degree of difficulty.  He may have learned that lesson by now.

 

If anything will cause him to blow up again it will be his confidence / hubris / being public about his positions.  It's a lot harder to change your mind when you have been all over the media making confident assertions and calling everyone else stupid. 

 

He will feel a lot of pressure to put up returns since so much of his capital came in after his 2020-2021 performance.  We'll see how he handles it.  Luckily his US fund is probably about full and the offshore fund will be slower to raise capital so he may have a plateau on new capital for a while here - which is good if you are short on ideas.

[John Hjorth]

For informational and leisure purposes only, and please make your own assesments and judgements :

 

Forbes [September 21^st 2022] : Meet The Investor Willing To Put His Money Into Ponzi Schemes. His Fund Is Up 593%  [<- I can't help it : ].

 

Well, according to the content of the article, Harris Kupperman must now be 42 or 43. He will eventually 'cool down' and settle from being a pretty wild thing - it certainly drags out teeth to blow up with other peoples money, that's for sure.

 

Entertaining to read about and to follow, without Mr. Kupperman totally being a break clown in  circus, only there for the kids.

 

When you have chosen such path for making money - making money off clients, as the contrary to making money with others [called partners], one has to be promotional.

Edited August 18 by John Hjorth
Spelling

[Spekulatius]

I don’t think Kuppy is unethical and he is indeed hard working. The reason ai believe he will blow up (which is a bit of a definition thing) is that his fund seems to be a one man show. One man shows almost ways blow up.

 

I actually think he is flexible with this investment - had one case where he made a macro call and was buying some stocks (or claiming) and I pointed a few things regarding one stock that he for sure had not looked at and known and quickly stated that he sold it.

 

But this also tells me that he looks at some things he invests in not very deeply. Thats was a few years ago during COVID and maybe his organization has grown since then and he indeed has some people in his organization that will voice to him a differing viewpoint.

 

In podcasts interviews he comes across as someone who is very very confident in this thesis which tend to be very macro related.

[Morgan]

6 hours ago, John Hjorth said:

For informational and leisure purposes only, and please make your ow assessments and judgements :

 

Forbes [September 21^st 2022] : Meet The Investor Willing To Put His Money Into Ponzi Schemes. His Fund Is Up 593%  [<- I can't help it : ].

 

Being up 593% is great until one bad year wipes all the previous years gains, which is what happens with most high risk funds eventually.

 

It is a little crazy he says he's willing to invest in ponzi schemes. Surely he doesn't but this is just for marketing purposes?

[Spekulatius]

7 minutes ago, Morgan said:

 

Being up 593% is great until one bad year wipes all the previous years gains, which is what happens with most high risk funds eventually.

 

It is a little crazy he says he's willing to invest in ponzi schemes. Surely he doesn't but this is just for marketing purposes?

I remember he posted this on Twitter as well. He stated he would put some money in a trade even if it’s a Ponzi, if he thinks the setup is favorable or something like this.

 

Again, i can understand where he is coming from, but if one of those trades goes bad and an investor sues him for loss of money, it would not look good in court.

I guess it all doesn’t matter as long as it works.

[Saluki]

If he's doing the 2 and 20 fee structure, he's getting $7.5mm from the 2% plus whatever he makes on the positive returns. 

 

I remember a guy who invested a lot of new fund managers when they set out on their own, saying that he wanted to see a lot of skin in the game. So if the new guy had managed to save up, say only $1mm from his time at another fund, he wanted the manager to take out a mortgage on his house and put that into the fund also, so that he would be "all in" and not take any risks with the investors money that would be likely to blow up and leave the manager in a position that he would lose his house and his wife would leave him and his kids wouldn't go to college. 

 

If Kuppy has all his money in the fund and he's investing carelessly, that's scary. But if it's just bravado and exaggeration, then it may be just part of his marketing schtick.  Who knows? 

[gfp]

1 hour ago, Saluki said:

If he's doing the 2 and 20 fee structure, he's getting $7.5mm from the 2% plus whatever he makes on the positive returns. 

 

The structure is 1.25% and 20% with a high water mark (but no hurdle).  He does have overhead, somewhat offset by the fees Mongolia Growth Group pays Praetorian PR to research and produce the subscription product KEDM.  Praetorian analysts / staff produce KEDM under contract but Mongolia Growth technically owns KEDM.  Looks like YAK will have to liquidate soon since they don't really have an operating business.