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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Militia Capital's Q1 performance lagged despite successful bank shorts due to speculative stock strength. Manager sees opportunity in undervalued financials like Synchrony Financial and defensive grocers like Ingles Markets, both trading at 6x earnings."
Militia Capital returned 5.1% net in Q1 2023 versus 7.5% for the S&P 500, generating 16% on longs and losing 9.4% on shorts. The fund successfully shorted all four failed banks (SI, SIVB, SBNY, CS) and caught drops in FRC and PACW, but lagged due to speculative stock strength and weakness in non-mega cap technology. Manager believes bank runs were rational responses to real problems and does not expect widespread financial crisis. Top long position is Synchrony Financial, a credit card lender trading at 6x earnings with strong deposit insurance coverage and conservative loan loss reserves. New top idea is Ingles Markets, a southeastern supermarket chain trading at 6x earnings with family management and property ownership. The fund reached $50 million AUM and is closing to new contributions to maintain edge. Currently positioned 220% long and 120% short, expecting strong performance when market dynamics reverse.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
High conviction evidenced by concentrated portfolio with named, sized positions (SYF as top long, IMKTA at 12% allocation), specific valuation targets, and willingness to add on weakness. Manager provides detailed fundamental analysis for each position.
Growth Outlook
Manager is cautiously optimistic about market opportunities, seeing attractive valuations in specific sectors while acknowledging current headwinds from speculative stock strength.
Risk Appetite
Fund maintains aggressive 220% long / 120% short positioning and is willing to take oversized positions in high-conviction ideas like IMKTA at 12% of fund.
Capital Deployment
Manager plans to gradually add to existing positions on weakness rather than deploying significant new capital, with fund now closed to new contributions.
Forward Guidance
Manager plans to add to positions on weakness and expects great results when market dynamics reverse, showing selective deployment bias.
Language Signal
Language contains more opportunity-focused terms (attractive, undervalued, growing) than risk terms, but acknowledges current challenges and headwinds.
Perceived Risk
Manager acknowledges specific risks around bank failures and market positioning headwinds, but does not see systemic crisis and views current challenges as temporary.
Opportunity Density
Manager sees attractive opportunities in specific sectors (financials, grocers) trading at low valuations, though acknowledges selectivity is required in current environment.
Time Horizon
Multi-year investment horizon evidenced by willingness to hold through volatility, gradual position building, and focus on fundamental value realization over 2-3 year periods.
