Investment memo

NORMAL CAPITAL

Hong Kong S.A.R.

« Back to Home

Thank you for your trust. Please read the following basic principles regarding the partnership investment carefully:

I cannot promise investment returns to partners, but I do promise:
1. I will invest the majority of my personal investable capital into the partnership;
2. I will seek a significant margin of safety in every investment (e.g., buying one dollar's worth of value for 50 cents), striving to minimize the risk of permanent capital loss (not short-term paper losses);
3. I will select companies whose prices are significantly below their intrinsic value from a ten-year or longer perspective, regardless of their popularity;
4. I will not predict market fluctuations or economic cycles. If you believe I can do these, or think investing cannot be done without such predictions, this partnership is not suitable for you.
Fixed management fee: Given the currently minimal operational costs, the fixed management fee rate is set at 0. It is anticipated that any future fees would only be to meet basic compliance and operational needs and will not exceed 1% of the Assets Under Management.
Performance fee: A 6% investment return hurdle rate is set. If the annual return exceeds 6%, I will charge 25% on the portion of the return above 6%.

Example: If the partnership's capital at the beginning of the year is 1 million and the annual return is 15%, I will charge 25% on the portion exceeding 6% (which is 90,000, i.e., 1,000,000 * (15%-6%)). The performance fee would then be 22,500 (90,000 * 25%).

Clawback: If the annual return is below 6%, the shortfall below 6% will be carried forward to the next year and must be recovered before any performance fee is calculated on new profits exceeding the annual 6% hurdle.
Benchmark for performance evaluation: Annual performance evaluation should be evaluated against the performance of the global securities market, for example, the MSCI World Index. As long as our results are relatively better than the index (e.g., -5% compared to the index's -10%), the performance for the year is considered decent.
Time horizon for performance evaluation: I believe 3 years is the minimum period to judge investment performance, and 5 years is a more appropriate timeframe. Therefore, I also expect that you will not redeem your capital for at least 3 years.
Information disclosure: To avoid confirmation bias and unnecessary distractions, I will not disclose the names of current holdings. However, I will publish a letter to partners every six months to report on the latest progress and thoughts.

投资备忘录

感谢信任。请仔细阅读以下有关合伙投资的基本原则：

我无法向合伙人承诺投资收益，但我承诺：
1. 我会把个人的绝大部份可投资资金投入到合伙公司中；
2. 在每一笔投资中都追求较大的安全边际（5毛钱买值一块的东西），力图将永久性的本金损失风险（不是短期账面亏损）降至最低；
3. 选择投资标的的依据是从十年以上来看价格显著低于价值的公司，而不是热门与否；
4. 我不预测股市涨跌或者经济波动。如果你觉得我能预测，或认为不预测就做不了投资，合伙公司不适合你。
固定管理费：鉴于目前极低的运营成本，固定管理费率设定为0。预计未来若收取也只是为了满足最基本的合规和运营需求，并且不会超过资产管理规模的1%。
业绩报酬：设置6%的投资收益率门槛。若当年的收益率超过6%，我将从超出6%的部分收取25%。例如：合伙公司年初金额为100万，当年的收益率为15%，那么我将从其中超出6%的部分（即9万，100*(15%-6%)）收取25%的报酬，即2.25万（9*25%）；若当年的收益率低于6%，我会在下一年先补齐低于6%的缺额，然后再在剩余的收益里按照每年6%的门槛计算业绩报酬。
评价业绩的参照：每年的业绩评价应与全球证券市场的表现相比，例如MSCI世界指数的表现。只要取得的结果相对好于指数（例如-5%相较-10%），那么这一年的业绩就还不错。
评价业绩所需时间长度：我认为3年是评判投资绩效的最短期限， 5年是一个更合适的时间长度。因此我也期望你的资金能在至少3年内不赎回。
信息披露：为了避免确认偏误及不必要的干扰，我不会披露当前持仓证券的名称，但每半年我会公布致合伙人信，汇报最新的进展及思考。