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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"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."
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.
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