Every month we get hundreds of emails just on returns updates, and this is on top of new funds trying to pitch to you. So how do we know which emails are important to open and read? Some investors wait for databases to compile these monthly data so they don’t have to manually punch in numbers in a spreadsheet. But you risk missing some critical piece of information that might cause you to redeem.
At GAO Capital, one of the data points we track is date that the data is received. If a fund usually sends out an estimate in the first few days, and suddenly they delayed by two weeks, then that’s a yellow flag.
We also track for sentiment in emails or attachments. Usually monthly updates are rather neutral they just give some numbers. But once in a while you get “sorry”, “unfortunately”, and that’s when the alerts go off.
Today I received an email which fulfilled both criteria: 1) letter came in way earlier than the usual mid-month; and 2) negative sentiment from the word “rejects”. The email title was also in a different format.
This prompted me to check on news associated with Blue Sky Water Fund and we see this article in Australian Financial Review (afr.com):
We are only tracking the Blue Sky macro fund so nothing popped up on our tracker till now (we have refine the algo). As we googled more, we see that the water fund has suffered a massive fall:
Source: Bloomberg
The fall coincides with the release of a Short research report by Glaucus Research on March 28, 2018:
Well you might say that the macro fund has nothing to do the firm (as a listed company) or the water fund, but this will prompt a potential investor to look into the pricing policies of the company as a whole. In any case, you’d be glad you read that email.