| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 5.7% | - | 33% |
Bireme Capital returned 33.0% net in 2025, significantly outperforming the S&P 500's 17.7% return through owning inexpensive international equities while shorting overvalued US stocks. The manager argues American exceptionalism is ending as institutional pillars including rule of law, independent judiciary, and fiscal prudence face unprecedented attacks under the current administration. Simultaneously, US valuations are at perilous highs with the S&P 500 trading at 23x forward P/E and CAPE near 40x, while extreme speculation has returned with vibe investing replacing fundamental analysis. The AI boom shows artificial profits today due to massive capex creating revenue for equipment makers while depreciation lags cash expenses, with commoditization likely to depress future returns. International markets offer compelling alternatives, with European and Japanese equities trading at 30% discounts to US multiples and Latin America at mere 10x forward earnings. The portfolio is positioned defensively through high-quality international holdings and shorts of overvalued US names, expecting this approach to succeed in 2026 as institutional decay accelerates and valuation extremes normalize.
US equity markets are priced for perfection at the moment American institutional foundations are rapidly weakening, creating unprecedented asymmetric downside risk that favors international diversification and defensive positioning.
The manager expects their approach of owning inexpensive international equities while shorting overvalued US stocks to be very successful in 2026 as well, given the asymmetric risk-reward favoring caution in current environment.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| 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 |
|---|---|---|
| 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 |
|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
|---|---|
| AAPL | Apple Inc. represents 1.6% of company owned with cost basis of $6,255 million and market value of $61,962 million, providing $280 million in 2025 dividends. |
| BLNK | We profitably shorted several of these story stocks in 2021, including Rivian (RIVN), Virgin Galactic (SPCE), Nikola (NKLA), and Blink Charging (BLNK). We are short many more today. |
| COST | Costco and Amazon are perhaps the clearest examples |
| GOOGL | In the third quarter, Google, Kairos Power, and the Tennessee Valley Authority announced a major collaboration centered on a novel power purchase agreement. Google followed this announcement with another significant step forward. On October 27, Google and NextEra Energy announced plans to restart the Duane Arnold Energy Center. |
| INTC | even Intel (a frequent punchline for missing cycles) found itself unexpectedly capacity-constrained in data-centre CPUs. |
| META | On January 9, Meta Platforms unveiled a new agreement with Vistra—the largest generator of competitive electricity in the United States—as well as with TerraPower and Oklo. The announcement builds on Meta's agreement last year with Constellation Energy and positions the company to become one of the largest corporate purchasers of nuclear-generated electricity in the United States. |
| MSFT | MSFT was a detractor in 4Q25 following its fiscal first-quarter 2026 earnings report released on October 29. While results were better than expected operationally, investor reaction was driven by guidance and capital expenditure intensity rather than headline performance. Revenue grew 17% year-over-year, exceeding consensus expectations, and Azure revenue increased 39% year-over-year, also ahead of estimates. However, management guided to a sequential deceleration in Azure growth in fiscal Q2, signaling some moderation after a period of exceptional demand. |
| NKLA | We profitably shorted several of these story stocks in 2021, including Rivian (RIVN), Virgin Galactic (SPCE), Nikola (NKLA), and Blink Charging (BLNK). We are short many more today. |
| NVDA | AI bellwether NVIDIA's very strong set of earnings in late November helped the AI theme re-assert its dominance when investors breathed a sigh of relief following the results. |
| RIVN | We have written frequently about Rivian over the past year, and for good reason. The company's long-term entrepreneurial mindset continues to impress, with a clear internal focus on building its own full tech stack and optimizing third-party relationships. Several developments stand out. Rivian outlined a tangible roadmap for its next-generation autonomy platform, supported by millions of miles of real-world data. The decision to develop its own in-house autonomy chip, the Rivian Autonomy Platform (RAP1), signals a deeper commitment to vertical integration and long-term control of its technology stack and creates the possibility of new revenue streams beyond vehicle sales. As Forbes put it, Rivian is now a tech company that also makes cars. Progress on manufacturing has also continued, including the Georgia plant and early work on improving internal efficiency through automation and robotics. These efforts may one day extend beyond Rivian's own operations, but more importantly, they reflect a culture that is constantly working to reduce dependency on third parties and build durable internal capabilities. Looking ahead, the R2 model represents a pivotal moment. Building vehicles at scale is extraordinarily difficult, but Rivian has laid much of the groundwork quietly over the past several years. Partnerships with Volkswagen and Amazon have strengthened the balance sheet and expanded strategic options. Autonomy, software, and manufacturing efficiency are converging in a way that gives us increasing confidence in Rivian's trajectory through 2026 and 2027. At its core, our investment thesis remains centered on Rivian's DNA. It starts with leadership (CEO RJ Scaringe continues to impress; you can listen to a recent and informative interview with him at Stratechery here), but it extends to an organization that thinks long-term, reinvests aggressively, and consistently works to control its own destiny. |
| SPCE | We profitably shorted several of these story stocks in 2021, including Rivian (RIVN), Virgin Galactic (SPCE), Nikola (NKLA), and Blink Charging (BLNK). We are short many more today. |
| TSLA | Under the previous system, companies that produced only electric vehicles—most notably Tesla—generated large quantities of credits that could then be sold to manufacturers falling short of their EV production targets, allowing them to avoid regulatory penalties. |
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