| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 20.9% | - | 10.1% |
Bireme Capital's Fundamental Value strategy has generated 20.9% annualized returns over 10 years versus 15.4% for the S&P 500 by exploiting investor behavioral biases through contrarian value investing. The managers correctly anticipated the COVID crash buying opportunity, the 2021 inflation surge, and Meta's rebound from $110, but have been early in warning about US market valuations since 2021. The S&P 500 now trades at 25x trailing earnings with a Shiller PE of 41x and dividend yield of 1.0% near all-time lows, while speculative fever has reached extremes with record margin debt and options activity. The fund has shifted to 92% net long internationally, primarily in Japanese software companies trading at 7-10x forward PE with strong growth, and -25% net short US-domiciled companies. The managers believe their positioning will be enormously accretive when US earnings and valuations normalize, though they acknowledge momentum can persist longer than expected.
Bireme Capital exploits investor behavioral biases through contrarian value investing, maintaining discipline despite looking foolish around extremes, which has generated 20.9% annualized returns over 10 years versus 15.4% for the S&P 500.
The managers expect Fundamental Value to outperform the US market given their positioning with high-quality overseas longs at reasonable valuations and US shorts at extreme valuations. They acknowledge momentum-chasing can always get more extreme but are confident their trade will work in the near future. They expect air pockets like those in the past week to become more frequent and severe as the equity risk premium is perilously thin. When the US sees a normalization of earnings and/or valuations, they expect their current positioning to be enormously accretive.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jun 15 2026 | 2026 Q2 | 3733.T, 3983.T, 9629.T, META, UMG.AS | Behavioral Bias, contrarian, Japan, software, Speculation, US Short, valuation, value |
BOL.PA 9629.T 3733.T 3983.T |
Bireme Capital has delivered 20.9% annualized returns over 10 years through contrarian value investing but has shifted to 92% net long internationally and -25% net short US equities. The managers view US markets at historical extremes with speculative fever reaching dangerous levels, while finding compelling opportunities in Japanese software at single-digit PE multiples with strong growth characteristics. |
| Mar 6 2026 | 2025 Q4 | AAPL, BLNK, COST, GOOGL, INTC, META, MSFT, NKLA, NVDA, RIVN, SPCE, TSLA | AI, Bubble, Corruption, Institutional, international, Speculation, Valuations | - | Bireme Capital delivered 33% returns in 2025 by shorting overvalued US stocks while buying discounted international equities. The manager sees American institutional decay accelerating under current administration while US markets trade at bubble-like valuations amid extreme speculation. International markets offer compelling alternatives at significant discounts, positioning the portfolio for continued outperformance as these trends persist. |
| Oct 31 2025 | 2025 Q3 | AAF.L, AAPL, BOL.PA, DIS, HUM, ITRN, ORI, RICK, SWON.SW | Alpha Generation, Behavioral Finance, Cognitive Biases, Concentration, Global Equities, value | - | Bireme Capital delivers concentrated global value investing through systematic exploitation of cognitive biases. The strategy has generated 19.5% annualized returns since 2016 by identifying mispriced securities where behavioral errors create opportunity. Current portfolio spans diverse global holdings with strong competitive positions, avoiding traditional value traps through rigorous bias-focused fundamental analysis. |
| Apr 9 2025 | 2025 Q1 | SPY | global, Market Crash, risk, tariffs, Trade Policy, valuation, value | - | Bireme Capital outperformed dramatically as Trump's economically destructive tariff announcement triggered a historic market crash, validating their thesis that overvalued US markets remain vulnerable to uncertainty. Despite recent declines, the S&P's 25 PE multiple still reflects market-top valuations rather than sustainable bull market foundations. Positioned globally with US shorts, they expect continued relative outperformance amid persistent policy uncertainty. |
| Oct 1 2024 | 2024 Q3 | 6125.T, 9401.T | Buybacks, Corporate Governance, Japan, M&A, undervaluation, value |
9401.T 6125.T |
Bireme has allocated 50% of NAV to Japanese equities, viewing this as the largest investor bias they've identified. Japanese firms trade at half US multiples despite quality fundamentals, creating anchoring bias from 30+ years of underperformance. Accelerating corporate governance reforms, economic normalization, and record foreign investment provide catalysts for rerating with enormous margin of safety. |
| Jun 21 2024 | 2024 Q2 | AAPL, AMC, ARKK, CMCSA, COST, CTAS, DIS, FSR, GME, NFLX, NKLA, NVDA, TSLA | AI, Bubble, Concentration, inflation, Japan, Short Selling, Streaming, value | DIS | Bireme Capital underperformed significantly in early 2024 but doubled down on differentiation through Japanese equity exposure and conservative short positions. The manager views current market conditions as a return to 2021 bubble dynamics with extreme valuations and concentration. Despite painful near-term results, they believe this positioning creates optimal setup for strong future relative returns when sanity returns to markets. |
| Apr 15 2024 | 2024 Q1 | AAPL, CGO.TO, HUM, IMB.L, META, NFLX, ORI, RICK | Behavioral Finance, Concentration, global, Long/Short, value | - | Bireme Capital exploits cognitive biases to find mispriced value opportunities in global equities. Their concentrated 10-15 position strategy has delivered 24.1% annualized returns since 2016 versus 12.6% for the S&P 500. The behavioral finance approach targets securities affected by availability, representativeness, and other systematic investor errors, avoiding traditional value traps. |
| Jan 31 2024 | 2023 Q4 | AAPL, AI, ARM, BTI, CLX, META, NFLX, ORI, RICK, TR, TSLA | fiscal policy, inflation, Magnificent 7, Shorts, technology, Tobacco, value | - | Value manager delivered 21.3% returns despite underperforming Magnificent 7-driven market. Successfully harvested gains from Meta and Netflix positions while adding shorts in overvalued Apple and consumer staples. Rebalanced to traditional value names including British American Tobacco at 6x earnings. Maintains significant short exposure amid concerns over fiscal sustainability and market concentration. |
| Jun 27 2023 | 2023 Q1 | AIRTEL.L, CGO.TO, META, RUN | banks, inflation, interest rates, real estate, technology, value |
ADI|BDX|FI|FND|HAS|META|MSFT|MSI|ORCL|TMO CGO.TO AIRTEL.L RUN |
Bireme Capital delivered 8.0% net returns through May 2023 while positioning defensively for post-bubble environment. Despite significant monetary tightening, equity risk premiums remain thin and vulnerable to economic scenarios outside Goldilocks. Portfolio emphasizes value opportunities like community banks and African telecom while avoiding cash-destructive solar names, focusing on companies with pricing power and strong balance sheets. |
| Feb 21 2022 | 2022 Q4 | BOL FP, NFLX, NKLA, OSTK, RICK, TSLA, TWTR | - | - | |
| Jul 11 2022 | 2022 Q3 | ARPU, NFLX, TME, TWTR | - | - | |
| Jun 30 2022 | 2022 Q2 | HCA | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
ValueThe fund maintains its contrarian value-based approach of exploiting investor behavioral biases, which has generated 20.9% annualized returns over 10 years versus 15.4% for the S&P 500. Despite value underperforming growth by 5.0% annually since inception, the managers believe value will return to prominence as it did after the internet bubble, when it outperformed growth by nearly 20% annually over 5 years. |
Value Growth Behavioral Bias Contrarian |
SPACsSPACs have returned to their highest issuance level since 2021, despite the average SPAC losing 62% of its value after merging. The managers characterize SPACs as vehicles for sponsors to profit at the expense of retail investors, citing Chamath Palihapitiya's four SPACs which collapsed 35% on average while he reportedly made $750 million in sponsor profits versus $800 million in investor losses. |
SPACs Speculation Retail Investors | |
AIThe managers use AI tools internally for research and software development, with Claude Code enabling non-professionals to build software. However, they are skeptical that AI will justify current market valuations, believing the vast majority of value created by AI will accrue to users as consumer surplus rather than to producers. They view AI as contributing to speculative excess rather than as a fundamental justification for elevated valuations. |
AI Software Productivity Valuation | |
SoftwareUS software experienced its worst drawdown since the financial crisis in Q1 2026, down 24.3%, as AI advances caused investors to reassess business strength and valuations. The managers see selective opportunities in Japanese software companies trading at 7-10x forward PE with high-single to low-double-digit revenue growth, low churn rates below 5%, and room to grow as Japanese SaaS spend is only 4% of IT budgets versus 17% in the US. |
Software SaaS Japan Valuation | |
Risk AppetiteThe managers describe pervasive speculative fever with investors buying $2.6 trillion of S&P 500 call options in a single day, margin debt at a record $1.3 trillion up 53% in a year, and leveraged equity ETF assets doubling in two months. They characterize the market as applying peak multiples to peak earnings in an environment of deteriorating institutions, ballooning deficits, and rising geopolitical risk, with the equity risk premium perilously thin. |
Speculation Leverage Options Margin | |
United StatesThe fund has shifted to a net short position of 25% in US-domiciled companies, down from being predominantly long at inception. The managers cite structurally higher inflation, Depression-level fiscal spending despite a booming economy, ballooning debt and interest payments, political dysfunction, institutional decay, erosion of America's edge in technology and academia, and a looming old-age dependency ratio crisis as reasons for their bearish stance. |
United States Fiscal Policy Debt Institutional Decay | |
JapanThe fund is 92% net long internationally with significant exposure to Japanese software companies. Japanese software companies trade at 7-10x forward PE net of cash with high-single to low-double-digit revenue growth, sub-5% annual churn rates, and significant room to grow as SaaS spend is only 4% of IT budgets versus 17% in the US. The managers view the recent declines in their Japanese holdings as creating more attractive opportunities. |
Japan Software Valuation Growth | |
DividendsBolloré announced a €1.5 per share special dividend equal to more than 30% of the company's share price, funded by proceeds from logistics business divestitures that generated roughly €10 billion of cash. The dividend will reveal the true nature of Bolloré's structure, as most shares are self-owned by subsidiaries in a web of corporate crossholdings, allowing Bolloré to pay a 30% dividend to external shareholders while retaining most cash inside the controlling structure. |
Dividends Special Dividend Corporate Structure | |
| 2025 Q4 |
AIManager believes AI valuations are in a speculative bubble driven by circular investments and unsustainable capex. While acknowledging AI's transformative potential, they argue most value will accrue to consumers rather than producers due to commoditization and competition. They are short several AI-related stocks. |
Artificial Intelligence Valuations Bubble Commoditization Competition |
ValuationsUS equity valuations are at perilous highs with S&P 500 forward P/E at 23x and CAPE near 40x. The manager contrasts this with much more attractive valuations in international markets, particularly emerging markets where Latin America trades at 10x forward earnings with 5%+ dividend yields. |
P/E Ratios CAPE International Emerging Markets Dividend Yields | |
Emerging MarketsManager is positioned to capitalize on the valuation divergence between US and international markets, particularly in emerging markets. They own high-quality international businesses trading at fractions of US multiples and profited from this approach in 2025. |
Latin America Valuation Gap International Equities Positioning | |
Institutional DecayThe manager expresses deep concern about the erosion of US institutions under the current administration, including attacks on rule of law, corruption, geopolitical disorder, and war on science. They view this institutional breakdown as undermining the foundations that historically justified US equity premiums. |
Rule of Law Corruption Geopolitics Science Institutions | |
SpeculationThe manager describes current market conditions as 'vibe investing' where assets are priced on fantastical stories rather than fundamentals. They cite examples like leveraged ETFs, zero-day options, story stocks, and meme investments as evidence of extreme speculation that can only end in disaster. |
Meme Stocks Options Story Stocks Leveraged ETFs Speculation | |
| 2025 Q3 |
ValueBireme focuses on exploiting cognitive biases to identify mispriced value opportunities in global equities. The firm targets concentrated positions in undervalued securities where behavioral biases create systematic mispricings. Their approach has allowed them to avoid value traps and significantly outperform traditional value strategies. |
Cognitive Biases Mispricing Concentration Behavioral Finance Alpha Generation |
QualityThe fund emphasizes businesses with strong fundamentals, high returns on capital, and sustainable competitive advantages. Examples include companies with barriers to entry, consistent margins, and material profits even during economic downturns. Quality metrics are central to avoiding value traps. |
ROIC Competitive Advantage Barriers to Entry Sustainable Margins Business Quality | |
| 2025 Q1 |
Trade PolicyTrump announced massive tariffs on nearly every country in the world, with average effective tariff rates increasing from 3% to mid-20s, the highest since 1909. The tariffs function as a tax increase on consumers and businesses, with estimates suggesting several thousand dollars in immediate cost increases for average households. The policy is viewed as economically damaging and politically untenable long-term. |
Tariffs Protectionism Trade War Import Costs Retaliation |
Risk AppetiteThe S&P fell over 10% in two days following Trump's tariff announcement, one of only four times in the post-war period this has happened. Markets were priced for perfection with euphoric sentiment, leaving stocks perilously exposed to uncertainty. The extreme valuations leading up to the announcement made the market vulnerable to even small amounts of negative news. |
Market Crash Volatility Euphoric Sentiment Extreme Valuations Uncertainty | |
ValueDespite giving up a year's worth of returns in a few days, the S&P still trades at a trailing PE multiple around 25, a level consistent with a market top rather than the beginning of a sustainable bull market. The fund continues to invest in a long-term, value-conscious manner and expects to benefit from continued turmoil, especially in relative terms. |
PE Multiples Market Valuation Long-term Investing Relative Performance Market Top | |
| 2024 Q3 |
JapanJapan offers the largest selection of cheap stocks globally, with firms trading at EV/EBIT multiples less than half of US peers. Corporate governance reforms are accelerating, with buybacks up 60% year-over-year and independent directors increasing dramatically. The manager sees this as anchoring bias writ large, creating a self-fulfilling prophecy of undervaluation. |
Corporate Governance Valuation Reforms Buybacks M&A |
ValueThe fund seeks to identify and exploit investor biases to find misvalued opportunities. Japanese stocks represent the largest size and scope of any bias they have uncovered, with many companies trading below book value and holding cash representing well over half their market capitalization. |
Undervaluation Investor Bias Book Value Cash Holdings Margin of Safety | |
Corporate GovernanceJapan Exchange Group and METI have pushed for independent directors, English-language disclosures, and analysis of cost of equity capital. Cross-shareholding has declined from 70% to 20%, and new M&A guidelines encourage takeovers rather than defensive measures. |
Independent Directors Cross-shareholding M&A Guidelines Capital Allocation Shareholder Rights | |
| 2024 Q2 |
ValueManager emphasizes value-conscious investing approach, noting that value stocks have given back all relative gains from 2022 resurgence and are back near record lows set at 2000 market peak. Believes current era will reward disciplined, discerning and value-conscious investors. |
Valuation Discount Undervalued Cheap Multiple |
StreamingDisney's streaming efforts including Disney+, Hulu and ESPN+ have not been profitable to date but are transitioning to focus on margins. Disney+ has 118m subscribers generating $10.3b annually. Manager expects Disney to reach streaming profitability in Q3 and become meaningful earnings driver. |
Disney+ Netflix Subscribers Content Bundling | |
JapanManager describes Japan as presenting the most attractive opportunity set ever seen for value investors. Roughly a third of gross long exposure is in Japanese equities. Thirty years of zero nominal returns and poor corporate governance has masked underlying economic strength. |
Japanese Equities Governance Discount Opportunity | |
AIAI enthusiasm is driving current market rally similar to 2021 bubble. Nvidia alone drove 37% of S&P 500 earnings growth over last 12 months. Manager views AI-related speculation as contributing to market irrationality and bubble-like conditions. |
Nvidia Speculation Bubble Growth Technology | |
InflationManager warned about underestimating stickiness of inflation when market was pricing six rate cuts. Market has come around to this view, now pricing only one rate cut. Secular changes including deglobalization and aging populations create inflationary pressures. |
Rates Deglobalization Sticky Monetary Policy | |
| 2024 Q1 |
ValueBireme exploits cognitive biases to identify mispriced value opportunities, focusing on securities affected by availability, representativeness, extrapolation, familiarity, and anchoring biases. The firm expects the value factor to provide a long-term tailwind after underperforming for over a decade. |
Cognitive Biases Mispricing Behavioral Finance Factor Investing Contrarian |
| 2023 Q4 |
ValueManager emphasizes exploiting investor biases to find high-conviction investments in undervalued equities. Rebalanced from richly-valued positions to traditional value names with undemanding valuations. Continues to find enticing opportunities in US and overseas markets where valuations are more attractive. |
Undervalued Rebalancing Traditional Undemanding Overseas |
InflationManager expects baseline inflation rate to be secularly higher due to deglobalization, aging populations, and increased demand for goods relative to productive capacity. Views inflation stickiness as most likely scenario, particularly in Services Less Rent of Shelter which printed 6.8% annualized. |
Secular Deglobalization Aging Stickiness Services | |
TobaccoInitiated position in British American Tobacco trading at 6x earnings. Company positioned as world leader in e-cigarettes and modern oral nicotine products. Expects reduced risk products to account for 40% of revenue by 2030, potentially transforming the traditional tobacco harm narrative. |
Reduced Risk E-cigarettes Nicotine Transformation Leadership | |
| 2023 Q1 |
InflationManager discusses the return of inflation after decades of declining rates, noting it has fundamentally changed the investment environment. The Fed now faces a Fed call rather than Fed put, needing to stomp on brakes when markets get too hot. |
Inflation Fed Policy Interest Rates Monetary Policy Economic Environment |
Commercial Real EstateIdentified as area of concern due to work-from-home headwinds and assumptions ingrained from 40 years of declining rates. Manager warns of potential step change in CRE valuations as refinancing assumptions prove false. |
Commercial Real Estate Work From Home Refinancing Risk Cap Rates Interest Rates | |
Community BanksManager increased positions in small community banks after contemplation, citing advantages over regional peers like diverse depositor base below FDIC limits and minimal held-to-maturity bond exposure. Banks trade at 5-6x 2023 earnings despite risks. |
Community Banks Regional Banks Deposits Interest Margins Bank Valuations | |
MetaBiggest winner through May 2023, up 120% with business results surprising on both revenue and expenses. Two large layoffs dramatically reduced expense forecasts from $100b to $85b, with ongoing employee growth limited to 1-2% annually. |
Meta Social Media Cost Cutting Operating Leverage Technology |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jun 15, 2026 | Fund Letters | Bireme Capital | BOL.PA | Bolloré SE | Entertainment | Marine Transportation | Bull | - | Asset Divestiture, cross-holdings, discount to NAV, entertainment, Europe, france, holding company, media, Share Buyback, Special dividend, Universal Music Group, Value | Login |
| Jun 15, 2026 | Fund Letters | Bireme Capital | 9629.T | PCA Corp. | Software - Application | Application Software | Bull | Japan Exchange Group (Tokyo Stock Exchange) | Accounting Software, growth, Japan, Low Churn, Mission-Critical, SaaS, SMB, Software, underpenetrated market, Value | Login |
| Jun 15, 2026 | Fund Letters | Bireme Capital | 3733.T | Software Service | Health Information Services | Application Software | Bull | Japan Exchange Group (Tokyo Stock Exchange) | Business Management Software, growth, Japan, Low Churn, Mission-Critical, SaaS, SMB, Software, underpenetrated market, Value | Login |
| Jun 15, 2026 | Fund Letters | Bireme Capital | 3983.T | ORO | Software - Application | Application Software | Bull | Japan Exchange Group (Tokyo Stock Exchange) | cloud, CRM, growth, Japan, Low Churn, Marketing automation, Mission-Critical, SaaS, Software, underpenetrated market, Value | Login |
| Oct 1, 2024 | Fund Letters | Bireme Capital | 9401.T | TBS Holdings | Communication Services | Broadcasting | Bull | Tokyo Stock Exchange | broadcasting, conglomerate, Equity, Hidden-Assets, Japan, Real Estate, Securities Portfolio, Sum-of-parts, Value | Login |
| Oct 1, 2024 | Fund Letters | Bireme Capital | 6125.T | Okamoto Machine Tool Works | Industrials | Industrial Machinery | Bull | Tokyo Stock Exchange | Equity, growth, industrial machinery, Japan, market share, Niche Market Leader, Precision Manufacturing, semiconductors, Value | Login |
| Jun 21, 2024 | Fund Letters | Bireme Capital | DIS | The Walt Disney Company | Communication Services | Movies & Entertainment | Bull | NYSE | Bundling, Content, DTC, entertainment, Experiences, Ip, media, Streaming, theme parks, turnaround, Value | Login |
| Jun 27, 2023 | Fund Letters | Bireme Capital | ADI|BDX|FI|FND|HAS|META|MSFT|MSI|ORCL|TMO | Meta Platforms Inc | Communication Services | Interactive Media & Services | Bull | NASDAQ | Cost Reduction, digital advertising, efficiency, Layoffs, operating leverage, social media, technology | Login |
| Jun 27, 2023 | Fund Letters | Bireme Capital | CGO.TO | Cogeco Inc | Communication Services | Diversified Telecommunication Services | Bull | TSX | broadband, Canada, Free Cash Flow, infrastructure, Network expansion, telecommunications, Value | Login |
| Jun 27, 2023 | Fund Letters | Bireme Capital | AIRTEL.L | Airtel Africa PLC | Communication Services | Wireless Telecommunication Services | Bull | LSE | Africa, digital payments, Emerging markets, Mobile Money, secular growth, telecommunications, Value | Login |
| Jun 27, 2023 | Fund Letters | Bireme Capital | RUN | Sunrun Inc | Utilities | Independent Power and Renewable Electricity Producers | Bear | NASDAQ | Accounting, cash burn, Interest rates, renewable energy, Short Position, Solar, Unit economics | Login |
| TICKER | COMMENTARY |
|---|---|
| META | And in 2022, when Meta reported poor earnings and ballooning virtual reality losses, investors soured on the stock (Jim Cramer was near tears). Meanwhile we pounded the table, calling Meta at $110 a share one of the best investment opportunities we have seen in our careers. |
| UMG.AS | Bolloré's most valuable asset is its ownership stake in Universal Music Group. UMG declined from €28 at its peak in 2025 to around €18 today despite reporting 8.6% constant currency EBITDA growth in FY 2025. While our previous calculations of Bolloré's NAV per share could perhaps have been criticized for implicitly valuing UMG at 25x forward earnings, UMG's 16x multiple today is near its lowest ever and seems quite reasonable. |
| 9629.T | PCA Corp. (9629) fell -12%. |
| 3733.T | Software Service (3733) fell -15%. |
| 3983.T | ORO (3983) was roughly flat but remains down about -40% from its August 2025 peak. |
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