Dear Partners,
We had a good year in 2025, however we were severely hamstrung by InteractiveBrokers’ move to limit Americans from buying small Hong Kong equities. As a result, international clients of mine, who comprise the vast bulk (94%) of my AUM, experienced a return of 83.11%, as I continued buying small companies in the world’s cheapest developed market throughout late 2024 and 2025. The returns chart you see above will be permanently marred by IBKR’s asinine stunt, as the Comus account is US-based and they cost our Americans a good chunk of change. For whatever reason, as I mentioned in the 2024 letter, they deemed Americans unable to separate legitimate company from scam stock in that market while allowing foreigners to continue buying whatever they liked. It appeared they had received many complaints through the 2021-24 period of HK stock losses and as a result, restricted investors from profiting from the likely and predictable gains to those wise enough to buy when fear was at its peak. Now that global investors deem both HK and China investible again, returns in many stocks there have been explosive and we had our best year to date.
There are still a few bargains I continue buying in HK for international clients, and outside of HK there are two European companies I’ve bought large chunks of in recent months, but otherwise, there are very few deals to find. So few that our US client cash position is now around 11%, which is the highest it’s ever been. The international client portfolio is currently fully invested but will have a rising cash position soon as there will be more selling than buying. In most markets it’s a great time to sell, as prices are bad. Since 2016, I haven’t seen a calmer or more expensive period for equities overall, which is ideal for exchanging shares for cash in anticipation of better opportunities for us. It’s not about timing, but rather pricing. Could anyone have known when the Hang Seng Index would bottom and begin to recover with any degree of certainty? Of course not, and so I loaded up near all-time low pricing from 2022-24 and suffered for three years before sentiment improved. And do I know with any degree of certainty how pricing will change in any market? No. But what is obvious is that prices are often much lower, and they likely will be again soon. Even if they don’t come around quickly, I have rigid criteria now for what prices we require to get the returns we experienced over the past year, so patience will be a virtue going forward. Even with high prices nearly everywhere, there are often tiny laggards who face issues every now and then for us to load up on. I expect a good chunk of our profits to come from the years in which entire markets are dead and recover sharply, however consistency in the leaner opportunity years will be key to our returns in the meantime.
For those looking at the performance charts above thinking the figures provide some insight into how our portfolio or those indices will do in the future; they don’t. All research suggests past returns have basically zero correlation with future returns (more likely negative), so to properly evaluate them you’d need to know the expected returns of the likely future constituents of each, which you can’t know without sifting through mounds of historical equities data to determine how each bucket of stocks is likely to fare over the decades. Point being, the performance of each is likely to dramatically change in some way that differs from this small sample of past years.
IBKR made another change this year, and one that makes some sense. They limited the annual % of AUM fee that advisors can charge to 2%, so as you can see in the table above, it provides a small but meaningful benefit to clients as they go from 2.52% to 2% annual advisory fees. I always prefer the performance fee, as it saves you money until I make you money, but for those who aren’t international or don’t fit the U.S. mandated high net worth criteria for it, this is a benefit.
In the future I may stop posting public letters as I don’t have any need for new client AUM and would rather reward those who trusted me from the start. If I ever decide on this, I’ll continue to send private annual letters with account reports.
As always, feel free to contact me with any questions or comments you have.
Best,
Aaron J. SaundersOwner & Manager, Comus Investment, LLC.[email protected]
Comus Investment, LLC
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