VAL - Still Nope To NOPE

2023-08-10 14:00:02 ET

Summary

• Still good security selection for Noble Absolute Return ETF, but bad sizing discipline.
• What happened with that combination?
• Catastrophe.

I'm sorry this worked.

Security selection is fun. Shorting is even more fun. Sizing discipline is boring, but getting it wrong can be deadly. In a way I was rooting for the success of the Noble Absolute Return ETF ( NOPE ). It had a broad mandate,

The process is designed to actively identify and capture investment opportunities over global market cycles and across regions, sectors and factors.

An experienced manager,

Renowned investment manager George Noble is NOPE's Portfolio Manager. He brings 40+ investment management experience across global market cycles.

And a mandate to actively seek out mispricing,

An ETF built on the philosophy of saying NOPE to passive investing, NOPE to ignoring valuations, and NOPE to asset bubbles.

Looking through the portfolio, I see a lot to like:

Among George Noble's top ten holdings, we overlap in both Valaris ( VAL ) and Tidewater ( TDW ); the latter is my son's largest holding and one I expect to own for a long time. Thematically, we're both oil and gas bulls. Among smaller positions, we overlap in Transocean ( RIG ).

But a lot of the problem with NOPE was on the short side. He aggressively shorted expensive faddish stocks. I bet that he'll be eventually vindicated as "right" on many or all of their fundamentals. For example, I agree 100% with his view on ARK Innovation ETF ( ARKK ).

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