with a company logo this crass, they deserved it, franklyEbullio Capital Management's February 2010 monthly report to clients plopped into my inbox this afternoon, sent by a reader kind enough to want to cheer me up a bit. Their monthly report starts like this:
"February 2010 was the worst month in the history of the Ebullio Commodity Fund and we regret to report a return of –86.25 pct for the month, which brings our total return for the year to –95.83 pct and to -89.63 pct since inception."
The Ebullio (Latin for "to produce in abundance", yok yok) Fund now has a NAV of $6.83. Or in other words, if you'd invested U$1,000 with these guys when the fund started in July 2008, you might now have enough for a McDonald's Happy Meal (and maybe the bus fare home). However the bad news is that the minimum deposit to this fund was $100,000.....ouch. But the fun really begins as the note unfolds, with the pinnacle standout line coming in paragraph four:
"The good news is that whilst our NAV is obviously impacted to the low side by this, the Fund continues to do business as usual."
That is so wonderful. I've sat here trying to write a comment on the above line, but it's turned out to be impossible to fit all the emotions it creates inside mere words. But wait! There's more!
"The liquidity position of the Fund is strong with in excess of USD 40 million in cash...."
Soooo...you got $40m in liquid cash and fund assets are noted at $1.47m in the same note to clients. Hmmm...perhaps you haven't told them about the current liabilities you might be carrying here, dudes. Y'know, just a thought.....
"..... and since the remaining physical book is very profitable going forward, we view the future with confidence (this confidence is being justified by our March month-to-date result which is showing a plus of more than +10 pct at the time of writing)."
Aha! You mean that you lose over 95% of clients cash in two months, but then the month-on-month increase might get the NAV from $6.83 to maybe $7.50 or so! Hold the Happy Meal! Make it a BigMac and fries! But let's leave it to manager Lars Steffensen to give us the wrap up:
Despite our very upbeat view on the future and performance of the Ebullio Commodity Fund, we have obviously had a tough couple of months and have certainly come to realize with Bad Blake (played by Oscar winning Jeff Bridges) in “Crazy Heart”: “You don’t see it coming, until it’s gone.....”
You too can read this pearl of financial script by downloading your own copy of the PDF right here. Hurry, hurry, cos it may be the very last time you get to read anything published by Ebullio Cap Mgmt.