Investing in undervalued securities worldwide

Weekly Update 14 March 2023

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$SIVB (SVB Financial Group) collapsed last week. As a result, we decided to aggressively de-risk the portfolio. All our US and European bank positions were sold on Friday, moving the majority of the portfolio into cash.

This was a risk control measure. We do not like to hold banks – which are risky companies and can lose 50%+ of their value in days – when there is even a slight chance of a banking crisis developing.

Even if no wider banking crisis develops, the collapse of $SIVB has negative implications for the profitability of the US banking industry. Depositors will move their deposits to the safety of US Treasury bills or from small to large banks. There will be more competition for deposits, and banks will earn less net interest income.

On the weekend, it was announced that a second US bank, $SBNY (Signature Bank), collapsed, and both its and Silicon Valley Bank’s depositors would be made whole.

The markets were not entirely reassured by this. Today European bank shares are down 6%, and US banks are under further pressure in pre-market trading. Selling the banks on Friday has significantly limited the portfolio’s losses today.

We hold a cautious near-term view on the market. The European index $EUSTX50 has broken down from a technical perspective and there are good fundamental reasons for the move. European banks have been a consensus long for many investors this year. Last week’s events could challenge that consensus.

The plan now is to monitor how the situation develops over the coming weeks, while holding plenty of cash or perhaps deploying some of it into defensive stocks in the Healthcare, Consumer Staples or Utilities sectors. We do not expect to buy back into banks before mid-April, when Q1 bank earnings start to come out and the damage to banks’ profitability can be assessed.

2023 performance YTD
@triangulacapital +9.0%
$SWDA.L +2.4%

Portfolio changes
Most of the banks and Energy companies in the portfolio were sold

Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

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Your capital is at risk. Other fees may apply. For more information, visit

Pietari Laurila is not a registered investment advisor and does not offer investment advisory, fund management or wealth management services.

Triangula Capital is a brand name, not an incorporated entity.

This page is provided for information purposes only. It is not a recommendation to copy the Triangula Capital strategy or to invest in any fund or security.

2009-2020 performance figures are from Pietari’s personal Interactive Brokers account. They are time-weighted returns calculated in accordance with the Global Investment Performance Standards (GIPS).

From 2021, performance is calculated by eToro.

Past performance is not indicative of future results.

Track Record

It is often said that past performance is not a guarantee of future performance.

That is true. But there is also some evidence indicating that portfolios that performed better in the past, do perform better in the future.

“[…] top-decile prior-alpha funds produce annual future alphas of about 150 bps, net of fees” Source

Risk warning: That is only one study. In general, past performance is not indicative of future results.

Aligned Incentives

Pietari invests the majority of his net worth in the strategy. This ensures that his interests are aligned with investors who copy the strategy.

“Funds with high-incentive contracts deliver higher risk-adjusted return, and the superior performance remains persistent. The top incentive quintile of funds outperforms the bottom quintile by 2.70% per year” Source

Risk warning: Pietari holds accounts with multiple brokers and may therefore have a conflict of interest when deciding which accounts he should trade in first.

Unconstrained Investments

The strategy has fewer constraints on its investments than traditional mutual funds.

The strategy portfolio can be invested in stocks, bonds or cash and these allocations can vary over time.

Compared to traditional mutual funds, the strategy also:

  • holds fewer securities
  • trades more
  • avoids following the index

Each of these points has been shown to be an important predictor of portfolio performance.

“We […] find that portfolio concentration is directly related to risk-adjusted returns for institutional investors worldwide” Source

“A one-standard-deviation increase in turnover is associated with a 0.65% per year increase in performance for the typical fund” Source

“We find that truly active funds significantly outperform closet indexers. Further, we find that the truly active funds are able to outperform their benchmarks on average by 1.04% per year” Source

Risk warning: Concentrated portfolios with few positions can suffer large losses if bad news arrives about any of the companies in the portfolio.

Cheap Stocks in Cheap Sectors

The strategy invests in geographies and sectors where values have collapsed due to macroeconomic problems.

Within these geographies and sectors, the strategy overweights stocks that trade at low valuations on measures such as price-to-earnings or price-to-net asset value.

Every stock in the strategy portfolio must also be a good company, with no obvious red flags or long-term threats to its business model.

The aim of the strategy is to maximize returns, even if this means taking more risks than usual.

Risk warning: The strategy portfolio tends to be concentrated in risky stocks, which means that its losses in any market downturn will likely exceed those of the market index.