Hedge fund allocator on an island. Got 99 problems but backtested returns ain’t one.
Heard and McDonald Island 🐧
Joined August 2019
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Barely Investible Capital Management Ltd retweeted
And the answer to the question of which regulator is more talented at crashing share prices is... both: US and China. Everyone that replied is actually a winner.
"No way bro, you crazy."
Yes way bro, 25 examples to refresh your memory. Do you own FICO?
The interesting part is the policy concern behind the regulatory action is similar in the US and China. So is the damage to share prices. The difference is in the implementation.
The three examples in the slide:
-Education:
---In 2010, the new US administration went after for-profit colleges. The sector collapsed, stocks fell 90%, bankruptcies and closures followed. USD40bn market cap and several PE assets wiped out
---In China, the 2021 measures against after-school tutoring (which btw came after 2 years of warnings but no one cared sending the stonks to 90x PE) destroyed the sector and have since been widely cited as proof that China is “uninvestable” (conveniently forgetting what happened in the US a decade earlier)
-Online brokers:
---Coinbase and Futu both dropped 30-40% after regulatory action
---The SEC accused Coinbase of operating as an unregistered securities exchange and broker
---The CSRC fined Futu for serving mainland residents without a domestic license
-Consumer lending:
---Ah, FICO, a long-time favorite of US quality investors, widely considered to have a deep moat. Then one day, Pulte at the Federal Housing Finance Agency decided it was time for some competition in credit scoring to lower down costs to borrowers. The stock is down 60% since
---In China, fee and rate caps on online lenders, also aimed at cutting cost of borrowing for consumers, have collapsed the share prices of online consumer lenders over the past year
One lesson here is beware of using national flags to underwrite your comfort level on "rule of law". The law rules in both places. What you have to worry about is the law changing, which it does, in both places.
There is an important difference: implementation speed:
---The US goes one company at a time, keeping the blast radius contained
---China can do everything, everywhere, all at once
---In the US, a full drawdown can take 2-3 years
---In China, it can take a week. China speed is called
If you think I'm cherrypicking I have another 22 examples for you. Key practical takeaway is open your ears to stay away from trouble, because typically (24 of the 25 examples, China and US) they will tell you they are coming.
baiguan.news/p/how-to-avoid-…
Do you want to avoid the next regulatory action blowing up your portfolio?
Easy. I will give you a framework based on precedents so you can spot danger.
But first, lets play a game:
Here are 3 examples of regulators targeting listed companies, and what happened to the share price (not great, Bob).
You have to guess the country.
(Hint: one is China)
(Hint2: one is US)
Barely Investible Capital Management Ltd retweeted
Best comment on the FT I’ve seen for a while.
Explains a lot of the last 14 years.
I would probably edit to
“ if reasonable people don’t address reasonable voters reasonable concerns then unreasonable people will , and unreasonably ”
Barely Investible Capital Management Ltd retweeted
My philosophy when I used to hire traders was that the optimal number of past blow ups was one.
Barely Investible Capital Management Ltd retweeted
I've done a couple of these deals in my time.
How it works:
In 2008 I priced up the Lehman's options Book.
It was a Sunday, so markets were closed.
You get the Book details under an NDA, and you know you're competing with several other banks, so it will be competitive.
Only some banks (or in this case HFs) have the size or willingness to take down the size and risk in what are always highly volatile markets.
Essentially, you then run the aum/portfolio via different risk outcomes, and give a number in $ of what level you will take the whole Book compared to the end of day mark prices on the Friday.
Most competitive price wins, or fund/bank that is most efficient reliable in execution helps.
In another case - deliberately no details - the Book/trade was priced during trading hours. Alot more moving parts, but timing is critical, risk more, reward potentially more.
Since several counterparties are aware of the trade, prices can start to move against the portfolio that is being priced. This can be due to front-running (strictly forbidden), or sypathetic synthetic front-running ie moving prices in highly correlated assets that have a knock-on impact on the portfolio priced, or because there becomes a lack of liquidity in the portfolio assets that are being priced so that the prices continue to move in the direction they have been - similar to SA assets this week.
For fun, if when pricing a distressed Book you believe other counterparties are front-running the book, say they are aggressively selling the assets/correlated assets to those in the portfolio, I (I mean one) could bid an aggressive bid above where the market is trading. I (one) could then take the full size and squeeze the front-runner shorters pushing the acquired distressed book in profit as off-side front-runners are forced to cover. [Also you report them to regulators for extra fun].
Good times.
Barely Investible Capital Management Ltd retweeted
#Idorsia Q2 results looking good.
Quviviq sales reached CHF 91 million in H1 2026, up 62% year-on-year.
Outstanding phase 2 results in paediatric insomnia with a view to expanding the value of Daridorexant beyond insomnia (ADHD)
Aprocitentan and pipeline excellent
Fantastic news 🔥
Barely Investible Capital Management Ltd retweeted
$IDIA 🚀 It’s literally in nvIDIA 😆
xitter.cf/unsuxesflinvstr/status…
Barely Investible Capital Management Ltd retweeted
Idorsia refinanziert Schulden und verlängert Liquiditätsreichweite brnw.ch/21x3bWl
Barely Investible Capital Management Ltd retweeted
You know what else is electric with 1,000bhp and actually looks like a Ferrari?
Yours for usd57k vs usd650k for Luce.
(my theory about the Luce is they don't want to be copied, fair. It will work)
Barely Investible Capital Management Ltd retweeted
Can’t wait how this one will pan out: “Former Millennium Management executive Bobby Jain is assembling a team as he seeks to launch the largest-ever hedge fund.”
Barely Investible Capital Management Ltd retweeted
Let me tell you why no ship tried to take an advantage of this.
No one believes anyone right now. No one even knows who is in control of Iran and the missiles that are aimed at the strait.
As the captain/owner of the ship, you don’t want to risk being hit - insurance will deny your claim + you will lose a ship at a time when rates are at their peak + environment indemnity will be void + if you are an VLCC, you would cause an environmental disaster
It is better to sit tight. The oil you loaded at $55 is $100 right now. You are sitting at a mega profit if you own this oil. In case you are able to pay the toll and get out, the destination country will pay you a fortune.
Why risk it all on a ceasefire that has minimal chance of surviving
Barely Investible Capital Management Ltd retweeted
The difference in Strait activity from when #3 first arrived / began observing the strait about 4-5 days ago to today is stark. Traffic has meaningfully picked up - there are still “dark” runs and ships transiting without AIS turned on, but there’s a lot more going along the coast of Oman. At least 15 ships have crossed, including at least 3 VLCCs.
When we arrived, virtually none were going through. Then a trickle through the Qeshm channel. It’s meaningful now, could be talking low double digit percent of pre-conflict volume. Meanwhile, expectations for a US operation involving “boots on the ground” within the next week or two are still high among locals.
When analyst #3 first got to the strait we were hopeful we’d get a clear cut answer - bullish or bearish, open or closed, war or deal. It soon became clear that was the wrong framework through which to view this trip. On the same day that we learned it was the broad expectation of nearly everyone in the region - from locals to informed parties - that US ground troops would be launching an operation (“boots on the ground!”), we also observed multiple ships beginning to cross the strait. Soon they weren’t just limited to the Qeshm channel.
It is clear to us that this isn’t as much a story in isolation as it is a story about the multipolar world and how it’s rapidly changing from what we’re used to. It’s a story about parallel warfare and diplomacy, US promises for the “Stone Age” in tandem with Allies’ seeking new venues for negotiation, and the changing global climate that necessitates this balance.
Before, it would have been unlikely to imagine a world where Japan, the EU and other US allies were negotiating with a country the US is directly in conflict in to secure passage and work on agreements while the US still maintained footing for an escalation of kinetic warfare. Now, that’s simply how the world works. These countries must deal with the issues imposed, as the US won’t be sorting it out on their behalf.
It’s undeniable the world is very different now and viewing this conflict through the lens of the past 50 years is a flawed approach. On Sunday, we will release our report that covers in depth what we’ve learned, how complex the situation is and what investment implications and nuances exist that have longer term implications than the next 100 points on SPX.
Barely Investible Capital Management Ltd retweeted
After today’s disaster, I think we make new lows soon.
Disclaimer: The aforementioned projections constitute forward-looking statements and carry extreme inherent risk due to the macroeconomic anomaly known as T.A.C.O.S. (Trump Always Chickens Out Syndrome). Be advised that sudden executive de-escalation or policy reversal may immediately invalidate all technical and fundamental analysis, rendering any prediction fundamentally unpredictable. Proceed at your own risk.
