Ann: Net Tangible Asset Backing, page-14

Yes my comment on their negative view on the healthcare sector was more from the perspective that they might get an extra bump up in their next NTA releases, for example like the one reported this morning. I think when they report the ones up until the 9th things should look good. As for the 10th and today well maybe not so good as those healthcare names bounced yesterday. Although the net invested position is 100% it is behaving like it has much more beta to the market. If overall markets head down from here it might be a little nervous watching the NTA releases from these guys.

The large book of short positions help enable them to have about 190% in long positions that can compound. Without these the net invested position would be 190% and I doubt many would be comfortable with that either! At the end of the day this long short strategy only makes sense if they get their calls right like they have since March. If they get it wrong like in 2018 it will be ugly! It is a riskier LIC and those that think the fund manager doesn't have any insight and is just a reckless gambler probably should use this recent strength to sell.

When you say these guys have a horrible record of shorting, it comes down a lot to what period you want to judge them on. If you think the period from when the LIC began is the only relevant data to judge them on well that statement seems fair.

The same founders have run the product in the unlisted space since late 2014. That seems to indicate they get things right over the longer journey, but with a major hiccup in 2018. Is that record totally irrelevant if we are trying to get some perspective on whether they are good at shorting stocks? Perhaps they were only good because AUMs were lower back then, or they have had some significant staff changes? Each holder now has to make that call I guess.

For what it is worth their long only product since 2007 looks to have some very respectable numbers. But once again, you could make arguments that data is also not relevant.