Letter to my Partners 2020

November 26, 2020

From: Bidyuth Dash

Subject: The position and future plans of our partnership

To my partners at Ronkonkoma Capital Funds LLC,

I took a moratorium on our fund, Ronkonkoma Capital Funds LLC, since its inception due to an extreme delay on our ability to create a business investment account with Fidelity Investments. The problem seems to have been due to a lack of appropriate operating agreement. So far the cost of the fund creation has been:

NY State filings: $235 for creation, $50 for filing of NYS news requirement

Newsday (Daily news paper for 6 weeks): $408

LIBN (Weekly newspaper for 6 weeks): $51.48

Total: $744.48

This is the total cost of starting our fund even though we didn’t conduct an operative activity.

I am expecting a NYS annual filing fee to come up for 2021 and will be another cost.

So far, I’ve collected $0.00 from anyone because of the moratorium I placed due to the uncertain COVID situation (which created an income instability for some of our partners) and because of my inability to create a business investment account with Fidelity.

But my biggest challenge in furthering the interest of our partnership is no doubt my lack of time. Though I learned a lot about starting this partnership, I found myself in a personal debt which took a heavy toll on my health and time for 2020. I intend on being out of this taxing debt by March 2021. I plan on quitting my second job at McDonald’s once my debt is substantially paid off.

I intend on dedicating a lot of time on our partnership once my debt is paid off: the time that I will have left over from not working at McDonald’s and by saving commuting time by having an online Spring semester for 2021. 

But my biggest challenge has been that I was not able to intelligently analyze any companies with enough dedication due to a lack of time. I hope that with more free time, I will be able to focus more on analyzing good companies to find and buy value. The companies that I want to look at are Bank of America, Wells Fargo, UPS, and FedEx.

I want to look at Bank of America because I want to learn how the COVID situation may have affected the banking industry, especially Bank of America. Do small businesses default on their loans? Does increased unemployment mean more defaulted loans and less business? Do government policies inflate the bank’s value due to low interest rates and how much money does the bank make by fees of servicing government policies such as helping distribute the funds from the CARES Act?

I want to look at Wells Fargo to analyze the book value and market position of the bank. I would love to learn about leadership, mismanagement and the value of reputation through Wells Fargo because of their recent seemingly decline due to the recent scandal the bank faces due to a flawed incentive program. More importantly, why did Warren Buffet invest in Wells Fargo (to what terms did he invest in Wells Fargo) and why does Berkshire Hathaway seem to divest out of Wells Fargo over time?

I would love to look at UPS and FedEx to learn about logistics and find other good companies within that industry. People are buying online and government seems to need companies to deliver vaccines from labs to people. These goods seem to need logistic companies and I see UPS and FedEx at the center. I presume that with the rise of online shopping, we will continue to see logistics and delivery companies continue to grow. This industry seems to be specially positioned for the new economy with its high cost of entry and seemingly low competition within the industry. How does a logistics company make money and make profit? What are the economic moats (something) special about each company?

These are certain things that I want to analyze and understand to help to somewhat navigate and lean to value companies in the banking and logistic industries. I see logistics as an area of growth and small/local banks as an area of value compared to what I may end up paying for them.

During my winter break (January 2021), I intend on creating a more legitimate operating agreement and having an Investment account with Fidelity. What may slow us down with this is if COVID-19 gets worse and we are required to stay at home once again.

I intend on starting to collect payments starting April 2021-March 2023.

I hope you guys now have a better understanding of my personal situation and the reasons on why I decided to pause my plans on our partnership.

I strongly believe in the saying, “Success comes to the prepared.” Even if I can not find good valued companies, I will be collecting the payments just incase market mechanics create a good situation to buy a good company at fair or discounted value. Even with being prepared, I intend on investing 20% of our portfolio into an S&P 500 index fund for comparison and a hedge against my own negligence to certain data (sort of an insurance policy). I will be investing mainly using a dollar cost investing method, especially in the S&P 500 index fund, over one and half year.

I hope you can fully understand where I’m planning on taking our partnership and thank you for believing in me. If you have any questions, please send me an email, text, or call me.