Three Main Points

As my memory rests

But never forgets what I lost

Wake me up when September ends

Green Day

Disclaimer 1: Nothing in this letter should be construed as financial advice.

Disclaimer 2: You’re reading 100% unfiltered Boris. No AI edits. 

The previous letter can be found here.

CONTEXT

In early December 2024 after taking a 25% position in Nebius and asking every existing client to contribute I just told myself - “wake me up when September ends”. Key decisions were made, I just needed September 2025 to come to an end. 

If you’re happy with results and have only 1 minute, jump to I’m your fiduciary after all.

THANK YOU, THANK YOU, THANK YOU!

 My letter from September 2024 was intentionally posing a question to stay or bail out. I wanted to keep managing accounts only for those people who kept believing in me and my value approach. I want to thank everyone who kept believing in me and my investment approach. 

This year it paid off handsomely and also just proved that value investment truly works - Vimeo and Moatably are going private at a reasonable rate of return for us.

I’m thankful to everyone who stayed as a client and equally thankful to those who bailed out. Last October, total assets under management were around 4 mil. By August it reached 10 mil and in September it increased to 15 mil. It is a combination of your contributions and great performance. 

I enjoy digging for asymmetrical value investments and your support enables me to keep what I am doing the most. Thanks for being loyal clients and friends, I hope you’re quite happy with current results.

THREE MAIN POINTS

• Performance review.
• Looking ahead.
• Value investment primer - curious case of Moatably.

PERFORMANCE REVIEW

Good news everyone! Performance for accounts since inception:

• 88% to 159% for accounts opened in mid 2023
• 105% to 117% for accounts opened in Dec 2024/Feb 2025
• 24% to 35% for accounts opened in Summer 2025.

For those who have opened accounts prior to mid 2023 but made contributions, this should map on performance of your contributions during those periods. As usual, I’ll send out annual account performance at the start 2026 and results can change from now and till December 31st, 2025. But so far, the results are quite satisfactory.

LOOKING AHEAD

VMEO, MTBLY, NBIS, BLZE and YQ more than doubled since mid July 2025. VMEO and MTBLY are going private. With these companies being taken private, the value investment valuation approach I developed for SAAS companies shines again - they’re being taken private at 2-3x the prices we could have bought them on the market in preceding 12 months.

Although I already identified a few draft opportunities to replace Vimeo and Moatable in our portfolios, there is still work to do to identify more opportunities and size all of them. The stock market in general seems to be very expensive to me - Buffett indicator through the roof, but it has felt this way to me since 2014. This feeling helped me embrace value investing principles.

I love what Buffett had to say on this subject in his 1994 investment letter.  

“We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen … none of these blockbuster events made the  slightest dent in Ben Graham's investment principles. Nor did they render unsound the negotiated purchases of fine businesses  at sensible prices. Imagine the cost to us, then, if we had let  a fear of unknowns cause us to defer or alter the deployment of capital.”

Be assured I’ll stick to my principles irrespective of political and economic situation:

1. My skin in the game - i.e. investing my own accounts as I invest yours.
2. Value investing - looking to minimize downside with asymmetric upside potential.
3. Put an effort into finding undervalued securities, not forecast the market.

I’m your fiduciary after all: To help me take the best care of your capital for your growth oriented capital, please drop me an email on your ability to add capital and timing of your contribution for the next 6-12 months. Please also notify me if you need to withdraw capital. This would help me allocate your capital into what I believe are the best ideas possible and in the most tax efficient way possible.

For some of you I already know the answer, for some others I don’t. Here are templates:

• Can contribute X every Y months.
• Can contribute X once Y event happens.
• Can’t contribute more, that’s all I have - please allocate capital given this constraint.
• You own variant

As a reminder, I’d like to manage not less than 10% of your liquid investable assets and not more than 30% of liquid investable assets. That way I’m assured you’ll truly benefit from upside, but downside won’t cost you much sleep.

Value investment primer - curious case of Moatably

Moatable is very curious case, because it offered lessons in

• Classic value investing opportunity.
• SAAS flavor of value investing opportunity.
• Arbitrage play - ability to make 3%-5% in 19 days

Why did we only have it for 2%-4% at the start?

Moatable had one bad trait - self centric egoistic management. Before Moatable was Moatable, it was RenRen - Chinese Facebook, that also had a lot of SOFI stock. Management allocated that SOFI stock to themselves only to be forced to return it to shareholders by US courts (link). Don’t deal with self centric egoists assholes is one of my principles. I’m reminded that I shouldn’t violate it every time I violate it. This time was no different. Given that management got a major slap by US courts I hoped they will be a bit more civilized this time around. 

Classic value investing opportunity.

Back in November we were buying $1 bills for 60 cents, or 35 mil liquid assets for 21 mil. 

Here is my note from November 26, 2024:  Their long term investments is into Fundrise LP, what appears to be real estate investment that gained a bit in value. this holding stands at 12.5 mil. Company trades under its book value / liquidation value. Liquidation value (45.7+6+12.5-5.2-24.2)=34.8 mil. market cap 21 mil. This includes their cash, property in Phoenix at carrying (!) value, fundrise investment, minus restricted cash (loan guarantee to Chinese banks, will have to repay), minus liabilities.  So liquidation value is 35 mil.

SAAS flavor of value investing opportunity.

Even at $3 (going private price) per ADR company is only trading at 0.4x enterprise value to recurring revenue growing ARR at 18%-25%? That’s insanely cheap. But they were trading even lower than that 

Arbitrage play - ability to make 3%-5% in 19 days

Once the company filed a tender offer it became clear to me that the company has capacity and will buyout major shareholders and will go private. Yet stock traded at around $2.85 per share, though proceeds after tender offer would be $2.95, hence we could be making about 3% on our cash after all the fees/commissions. So I loaded up on it as much as I could.

The story concludes today. 

Moatable is taking the company private at a price of 3.00 per ADS. That means they take the company for 55 mil in cash, yet get 21 mi in liquid assets. More like spending 34 mil for a company with 77 mil in annualized recurring revenue or buying a company for 0.4x recurring revenue, insanely cheap for a company growing 18%-25% YoY. It is a steal at this price. To put things in perspective, Vimeo is getting acquired at 4x annualized recurring revenue. 10 times what Moatable is taking itself private. 

So here we go.

I was right about asshole management - they are stealing it. But they are also doing it in a civilized way - we made 2x-3x our money and additional 3-4% for available cash after their tender offer announcement. But if they were civilized we’d make 20-30x. But we only had this opportunity because they were uncivilized assholes to begin with. Circular logic.

CLOSING THOUGHTS

Earlier this year I decided that I do want to keep my practice small in terms of clients, drawing inspiration from early Fisher Investments. I decided I would like to have not more than 50 clients, or 1 client meeting per week per year with two weeks of vacation. This is like a backpacking journey or a long surfing day. I welcome everyone to join me in this experience.

Three Main Points is also on a good track in terms of AUM, while 15 mil is tiny comparatively speaking, it is good enough for me and I have a feeling it will snowball eventually.

Recently I started doing client reconnect calls and I enjoyed seeing you all a lot!

Here is a list of upcoming reconnect calls, email me which ones you’d like to attend.

• Thursday, October 2nd 6 - 7 pm PT - NBIS / AI educational webinar. This is mainly geared towards the reddit community, but my clients are welcome to join. Email me.
• Thursday, October 16th 6 - 7 pm PT. Three Main Points clients and their friends. Open discussion, lots of topics left over from the last few calls. 
• Thursday, October 30th 6 - 7 pm PT. Women-only call. This is for my female clients, their friends and spouses of my male audience. I found the women audience lacking in the last few calls and felt that there is a need to have it as questions I get from women are quite different from questions I get from men.