Investing in undervalued securities worldwide

Weekly Update 25 March 2024

Share Article:

Our portfolio has started the year strongly. The MSCI World index is up 9% this year, the portfolio 16%.

I believe it is too early to sell. The economy is gaining momentum, but investor sentiment has only turned positive, not yet exuberant. At the same time, the banks in the portfolio trade at below-average valuations. Should valuations normalise, further upside would be available.

If there is one risk that investors should monitor, it is a possible resurgence of inflation.

If the Federal Reserve cuts interest rates too fast, inflation could conceivably surge to 7-10%.

In this scenario, the Fed would have to aggressively increase interest rates to 9%. This would lead to an economic disaster and a market crash.

This scenario, while extreme, is not inconceivable.

Inflation has inflected higher. Trend inflation has increased from 2.5% to 3% in the last few months.–:mct-inflation:trend-inflation

The recent gains of the stock market and bitcoin will boost consumer confidence. Consumers will be happy to spend more, which will add fuel to the inflation fire.

There is thus a risk that inflation makes a comeback later this year, which would probably lead to a poor year for the stock market in 2025.

The timing of the US Presidential election is relevant here. Both Trump and Biden want to spend; no candidate wants to control the budget deficit. There is a plausible scenario in which the economy does well this year, inflation increases, the new President announces new spending programs, the market loses confidence in the sustainability of US debt, long term interest rates surge to 6-7%, and a financial crisis results.

I indeed believe that the US debt trajectory will be called into question at some point this decade.

I am thus cautious about 2025 when the US government no longer needs to pump the market higher due to the upcoming election. By 2025, economic momentum will have turned, and the conditions could be in place for a stock market crash.

That, however, is all in the future. For now, conditions are positive. Let’s enjoy it while it lasts. I stay long cyclical stocks that benefit from the improving economy.

2024 performance
@triangulacapital +16.0%
$SWDA.L +8.5%

Portfolio changes
Unum, Equitable Holdings and Eni were sold. They were replaced by Acerinox, Arkema and Barclays.

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

Share Article:

Leave a Comment

Your email address will not be published. Required fields are marked *


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.

eToro (Europe) Ltd., a Financial Services Company authorised and regulated by the Cyprus Securities Exchange Commission (CySEC) under the license # 109/10.

eToro (UK) Ltd. is authorised and regulated by the Financial Conduct Authority (FCA) under the license FRN 583263.

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.