Investing in undervalued securities worldwide

Weekly Update 8 January 2024

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2024 has started positively. If you believe in the January Barometer – which says that the first few days of the year set the tone for the rest – this could be a good sign. Although looked at objectively, the January Barometer is more an old legend than a real trading rule.

While most of my portfolio is invested in Financials, it also contains one Energy position, $BP.L (BP)

BP shares were penalised in the fourth quarter due to a significant, trading-related Q3 earnings miss.

However, the company continues to earn lots of money for shareholders. The cash flow yield investors get from the shares is in the double digits.

With oil companies, a key variable is always the price of $OIL itself.

In 2023, Brent oil traded in the $70-90 range, with little overall movement. Most analysts expect a similar range for this year.

Although oil demand has already recovered from the pandemic, oil supply has also grown. US shale producers produced more oil than predicted in 2023, and Brazil and Guyana will be leading capacity additions over the rest of the decade.

Overall, so much production capacity has come online that producer cartel OPEC has had to resort to supply cuts to defend the oil price, leading to significant OPEC spare capacity being available. Oil prices may have some downward risk if Saudi Arabia decides they want to reignite the fight for market share and punish higher-cost producers, as they did in 2014 and in 2020.

Another risk is that the war in Ukraine ends, bringing Russian supply back to the market.

Regardless of these risks, oil companies are so attractively valued that I view them as one of the best sectors to invest in for the long run. But to get an optimal entry point, I’d like to see some of the risks above to be realised, leading to lower oil prices. Oil companies could then be bought at a discount.

It seems that many of the best-performing sectors this decade have been “instability” sectors such as Defence and Oil. Well-timed investments in these sectors, and others that benefit from uncertainty such as Gold, should yield good profits over the coming years in the new, more unstable economic environment of the 2020s.

2024 performance YTD
@triangulacapital +2.0%
$SWDA.L -1.5%

Portfolio changes

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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eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFD assets.

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.