The Minotaur Global Opportunities Fund had a solid month, posting 7.7% in November. Our biggest contributor was COVER Corporation¹, which rose 39% after upgrading its earnings guidance in October, then beating that upgrade with its quarterly results reported in November. Revenue grew 50% year-on-year (with revenue per VTuber up 41%) as the company successfully executed on its strategy to expand from a VTuber agency into a comprehensive IP business. Their merchandising segment’s 80% growth, along with their international expansion efforts, are particularly encouraging signs of this transformation.

November was all about the US election where the ricochet was felt globally. Large movements were seen across global asset markets including US stocks, treasury bonds, currencies, crypto, and China, Mexico, and other emerging markets indices.

For the Trump impacts on our portfolio specifically - on the positive side, our second biggest contributor was our holding in IperionX, a recycled titanium play that benefits from Trump given its exposure to onshoring of manufacturing in the US, and it’s a beneficiary of tariffs (70% of titanium sponge comes from China and Russia) and Government funding.

In contrast, our largest detractors were our cyclical European names and our Japanese pharma company, Chugai Pharmaceutical, which felt the brunt of the US election result. Chugai fell 10% on no newsflow. We think it may have gotten caught up in the pharma/vaccine malaise from Trump announcing prominent anti-vaccine politician, Robert F. Kennedy Jr, as his pick for Health secretary.

We have been challenged by some investors on our European exposure. We acknowledge that choosing Europe over the US generally over the past decade would have seen you exposed to a dormant stock market, brittle currency, crisis-ridden political system and stagnant economy. In short, it would have been a losing trade. Trump’s plans to cut taxes, gut regulation and impose tariffs could see that gap between US and Europe widen further. At $63 trillion, the total value of US stocks is now four times bigger than all of Europe’s bourses combined. Ten years ago it wasn’t even twice the size. Europe doesn’t have a single public company valued at more than $500 billion. The US has eight worth more than $1 trillion. But that could also be an indication of the relative expensiveness/cheapness of the two markets.

This month, our portfolio outperformed both our benchmark index and the S&P500, despite our European exposure. We think this is because we can find the opportunities in all markets despite the macro, while maintaining the benefits of diversification. We know we harp on this a lot but we really believe it. Trump’s win is encapsulated in the Greek philosopher, Diogenes’, quote, “The mob is the mother of tyrants.” Trump read the mob well. For our part, we try not to get in the way of the mob but instead understand it, face it with compassion and run our own race.

¹ Cover Corp was profiled in our June 2024 Quarterly Report.