December 3, 2017
December 3, 2017


It’s been a while since I responded to emails publicly. If you wrote me, I responded privately. Here are some of the most-asked questions. Ask Kuppy will return to its normal (haphazard) schedule going forward…

Hi Kuppy,

I’m a long time reader, and I am the type of investor you were pre-2008: good small caps that will compound over 3-5yr periods. I’d like to better understand macro and currency trends– besides just diving in, is there anything you’d suggest I read or follow here?

Thanks for your advice,


Economic cycles are mostly caused by the actions of politicians and central bankers. Read your history. These cycles repeat over and over. I have a few good book recommendations on this site. They make for a nice starting point for economic history.

I really enjoy your travel writings. They combine travel with history and investment. You need to do more of them.

I saw you went to Nevis. Were you looking for opportunities? Can you do a piece on Nevis? Been anywhere else lately?


I travel a lot and it’s usually for business. I will try to write more, but have been very busy lately. In the case of Nevis, it was a vacation to get away and avoid emails/stock quotes for a week. If in Nevis, I highly recommend the Golden Rock sugar mill. Really amazing place.

As for the history of Nevis, here goes:

Nevis was colonized and due to rich volcanic soils and abundant rainfall, it came to produce the highest sugar yields per acre of anywhere in the Caribbean–making it the richest sugar island of them all. For the white planter aristocracy, it became the wealthiest per capita place on earth for about 200 years (think Qatar cubed) with some of the grandest and most luxurious estates in the Caribbean (though I’m sure it sucked if you were a slave). Admiral Nelson chose to go there for his wedding, Alexander Hamilton was born there….

Beginning in the early 1800’s, sugar beet production in Europe ramped up which destroyed the profitability of sugar cane on the islands as it was cheaper to produce sugar beets in Europe and the supply chain was substantially easier to manage as all production was in Europe. By the time that Slavery was phased out in the 1830’s, most British sugar growers were so indebted that they were happy to accept a small contribution for their slaves and give up on sugar. At that point, excluding a handful of British colonial administrators, the white settlers left the island and it remained mired in poverty for over a century. Following independence, Nevis has drifted towards the twin economies of offshore-banking and tourism that fuel most of the Caribbean economy. Unlike many other islands that are deluged with cruise boats, Nevis has retained a special small-town charm of relaxation, friendly locals, minimal crime, great food and incredible beaches. Go there to relax for a week and ignore the investing side–or at least that’s what I did.

Hello Dear Kuppy,

I was wondering if you have changed your mind about opening your fund to new investors. I know you occasionally Write about new investment ideas such as buying MLPs, oil , oil service co, bitcoin, Uk home developers, … But it is still difficult for an amature to read between lines and choose the best ones.

I currently have 2 outside investors in my fund and prefer the flexibility that it gives me. If I were to take in new investors, it would involve infrastructure and compliance and all those things that distract me from investing. If I ever change this policy, I’ll post something on the site.

hey kuppy…nice piece on bitcoin. do you mind if i ask how you bought bitcoin? ie exchange/mechanism….also, do you have any fear of your position’s security? ie being hacked…thanks!

I’d rather not say which exchanges I used but I spread the bet b/c I am indeed worried about security.

Do your own research. None really impressed me, but I went with the largest that have the most prominent VC firms behind them.

Kuppy. Loved your Buffett article. Why don’t more journalists call things like they are?

They’re all whores to the system… haha

To be clear, I definitely admire what Buffett has created and how he’s out in front of yet another trend while pretending that he isn’t.

Did you ever play any MLPs?

When I started writing the MLP/leveraged yield vehicle series, I planned to come out with some picks. Unfortunately, they bounced before I could share names. I bought some shares, but was averaging in and only got 1/3-1/4 sort of positions in late Jan/early Feb as I had hoped for 1 last flush when dividends were cut (most never cut dividends). I played CEQP, CCLP, SXE, NRP in decent size and a few others not in MLP land like CAI, TERP, TRTN (formerly TAL). I also owned bonds and preferreds in a number of these along with some E&P and shipping stocks. I sold too soon and have no positions, having sold the last of my TERP a few weeks ago. I suspect that the MLP blow-up is still ongoing. If you look at these sectors, there’s still too much supply and new infrastructure/capacity is being produced at much lower costs, at a time when demand is trailing off. These companies claim that contracts are ironclad, but we’re seen that they don’t fully hold up in BK court and sometimes it’s better to get sued and cut costs–rather than deal with overpriced contracts. Combine lower revenues with elevated debt and I think we will see a 2nd round of blow-ups here. To have a bottom in a sector like this, you need more guys to go bust.

Junior mining companies have had an amazing run. Do any interest you?

I didn’t buy them when they traded under cash last winter–why would I buy them now? I own a bunch of gold and some Bitcoin and that’s how I’m going to play this sector.

Are you still bearish on the markets?

I am quite bearish. The markets remain propped up by central bankers, but as we’ve seen in Japan, at some point, the markets stop caring what the bankers want.


From the interview with Capitalist Exploits, it sounds like you had perfect timing on your sale of Foxtons. How did you know to sell? When will you buy it back?


Timing the sale was really just luck. It was up 20% in like 2 weeks and it’s hard to ignore a gain like that–especially when I don’t have a long-term macro thesis on something except to say that it’s cheap and oversold. That said, it rallied another 10% after I sold it, so my timing wasn’t that perfect. It was part of a large basket of UK stocks that all rallied 10-30% in the 2 weeks after BREXIT.

I don’t know if I’ll buy it back or not. I have a long list of companies that I’d like to own at the right price. Foxtons is on the list.

Any good macro trends that you’re following?


There’s always trends that I’m following, but nothing really excites me as an investor. The big money over the past few years has been made as various sectors melt-down and you can buy stuff cheaply and sell for a quick bounce gain when fear abates. That’s not really an exciting strategy to write about however.

HK-I know that you don’t short, but if you did, which large company do you think is the best short.


Tesla has been called Enron on wheels for a while now. Enron pushed the envelope, but didn’t have the nerve to release pro-forma revenue….

Besides mining, what other sectors do you avoid or what has been the one sector that has hurt you the most.


Tough question. I don’t think it’s a single sector–but rather a type of investment.

I think the biggest trap that I’ve fallen for (a few times now) is to underestimate the rate of technological change when a company has a leveraged balance sheet. I remember buying Movie Gallery (#2 video rental chain) for 3x TTM cash flow and watching it go from hundreds of millions in cash flow to bankrupt in 18 months. This was despite operating in a douopoly with Blockbuster and the fact that the movie studios had billions in revenue tied to this sector. Industry experts told me over and over that the studios would protect their cash cows and ensure that technological change was slow and that the video stores were involved in this change. It didn’t matter, the change destroyed the whole sector.

Similar things are happening in multiple sectors now. Video rental reminds me a lot of the hotel industry currently facing Air BNB. 2 years of -10% comps would bankrupt the whole hotel sector b/c of leveraged balance sheets. All the lobbying in the world can’t seem to stop the sharing economy. High margin, fixed cost busiensses are very vulnerable to small changes in comps.

Great trade on UK stocks. Can you send out alerts when you buy stuff, even if just a trade?

What would the alert say? “FTSE is down a lot, buy a basket of what’s down the most?” haha

I prefer to use this site to talk about themes and strategies, rather than individual stocks.