Alankrit Capital Q3 Letter
Alankrit Capital
Q3 2024
October 17th, 2024
The third quarter of 2024 was a challenging one for Alankrit Capital, marked by a decline of 12.63% in our portfolio’s value.
Our top detractor was Moberg Pharma, which we have now fully exited.
Reflections:
It’s time to shift from a high-risk, aggressive strategy to one focused on growth at a reasonable cost. For years, I operated with a mindset that risk was necessary for reward, (which worked well) but now I recognize the value in discipline and caution.
I’ve also been tracking a model portfolio of 20 positions, each with a 5% weight, and it’s outperforming my main portfolio. This divergence has given me a lot to reflect on.
Looking Ahead:
We are slowly acquiring shares in a new company ( “A”)
“Company A” is tied to a riskier product from “Company B.”
However, Company A itself controls a cash-generating business which is growing revenues by over 40%.
In a perfect world "B" is going to smoke "A" performance wise. But if things go wrong? Or there's a quarterly miss? Holding the equity of company B is going to hurt. And we can still get above market returns with company "A”.
Realistically we should be able to own around .3% of the company pretty soon with the goal to own 0.5-1.0% of it.
Bigger Picture:
We remain very optimistic about the aerospace and defense sector. The fundamentals continue to strengthen, and we see some interesting M&A opportunities on the horizon.
Our position in Fairfax Financial $FRFHF continues to perform well. We still believe it trades fairly and have continued to add to it.
One company that recently caught my eye is Truxton Trust $TRUX (no position). The stock screens expensive, but I believe their asset/wealth management business is a hidden gem worth watching.
After being located in Tennessee since inception they have decided to expand to the Georgia market.
With that in mind, I look forward to another quarter.
Feel free to message me any time.
Anshul Puri
puriansh@iu.edu