Investing in undervalued securities worldwide

Weekly Update 3 April 2023

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The first quarter ended positively for stocks. Our strategy returned +14% for the quarter, beating the +8% return of the MSCI World index by 6 percentage points.

This performance was achieved despite our style being out of favour. Value stocks ($VTV) returned a negative -1% for the quarter, weighed down by the Financials and Energy sectors. Growth stocks ($VUG), by contrast, were helped by lower interest rates and their oversold condition after a 30% fall in 2022, and returned +17%.

We see the trend of relative Value/Growth performance reversing in the second quarter.

Value stocks tend to outperform if the Financials and Energy sectors do well. Financials were hit in the first quarter by the collapse of Silicon Valley and Signature banks. It appears that the banking crisis has now been contained to only a few companies. If worries about the banking system recede and the economy holds up, banks could bounce back after a 10-20% fall in March.

Energy companies performed poorly in the first quarter because oil prices fell. This appears in part have been due to an unwind of speculative positioning in oil futures. Yesterday, OPEC announced they are cutting oil output, as a result of which oil prices jumped 5%. If the oil price holds up at current levels, Energy companies look too cheap.

It appears that despite last week’s rally, investor sentiment remains depressed, which could fuel further gains at the index level. Seasonality, too, is very positive in April.

Overall, we are bullish on the market for the next month. Beyond that, we continue to hold to a cautious view because the yield curve is heavily inverted, which has historically preceded severe market crashes.

2023 performance YTD
@triangulacapital +13.8%
$SWDA.L +7.7%

Portfolio changes
AstraZeneca, Bank of America, Allianz, AXA and Telefonica Brazil were sold. They were replaced by ING, Assurant, Suncor, Prudential and Bankinter.

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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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.