So I'd like to take the rest of our time and talk to the panelists a little bit in light of the speculative environment in the markets and also sort of a bifurcation that's occurring in the markets between AI and certain tech spending and lots of other stocks that are kind of going nowhere, going down. Where are you finding—and I know you're not thematic investors, all three of you. You're all stock guys and girls—but where are you finding interesting places to look? And Joyce, you mentioned something you kind of avoid. And where are you basically avoiding in the current market? So Joyce, why don't you start?
Yeah, no, definitely. I think like the reality is that for shorts, we always look for variant perception and a catalyst. And we are a little bit more thematic in our shorts because we think a rising tide lifts all boats and a receding tide takes down a lot of names in the same neighborhood. So one of our favorite themes, to your point, especially in a market where if you have like, you know, AI frenzy, everyone trying to jump into that, one of our favorite themes is like fake AI. So we've been short like, you know, a Chinese company that used to be a home decoration company that like turned into an AI server company where they like photoshopped Nvidia product catalog to put it on their website and they said they hired some people. We looked them up on LinkedIn, they did not. There's just a lot. And one of the favorite screens we ran and how we found Resolve AI were name changes that suddenly had AI in it. And so we actually think it's a really rich market environment for shorts. Our short book is up this year. We've had positive short performance from the fund inception. And I do think like the thematic trying to find where excess where people claim when something is good and people claim they have it but they actually don't. For us that's a really rich ideation opportunity and you can ballast it with like secular decliners that don't have the same like volatility as some of these like spicier shorts.
I think our best shorts this year have been the more boring areas, like avoiding the topless parties, basically. Things like Agg, or you know, if you look at the breadth of the rally, the breadth of the rally is really narrow, right? It's just a few stocks that are just ripping, and actually the modal stock is down. Like the performance, like if you look at the wider market, it's been really tough. You look, we think that that's pretty emblematic of like the 99-2000 and what it kind of looked like back then, at least our study of it. And in that context, you know, some of the more boring stuff has actually been working really well. Like, you know, we've got a couple shorts in the ag field where we're looking at the closures of the Straits of Hormuz and what's happening in like chemicals, right? Look at the prices of fertilizer, sulfates around the world. That has consequences in the supply chain. That has consequences for how growers and farmers plant, and that's going to show up in companies that you've probably never heard of. And that certainly, you know, someone in their mom's basement with a wife beater on is not blogging about on Twitter. Like it's just that's—and it's avoiding those type of like high retail, high Twitter, like a little bit more of the boring shorts actually worked for us this year.
Yeah, definitely avoiding AI, right? I mean, avoiding AI has been a good place to start, and I think we've mostly avoided AI and we've done pretty well from shorts this year as well, and we're up also on an absolute basis as well. I think what's interesting, we follow the capital cycle a lot and we do some thematic shorts. I think the one that people are talking more about is probably what's going on in private credit and private equity. That's been a lot of money going there for a very, very long time, and I think, you know, the story has changed a little bit. I think people are looking for proof in the pudding, and there's interesting shorts to be done maybe in that space as well, but also kind of in the areas where they've gotten involved because, you know, what ends up happening is that they find something that's very, very interesting and then they just, you know, pile in basically. And then, you know, for instance, Mr. Car Wash. I think that's one you've talked about in the past. It's an interesting company. I mean, car washes are a really, really good business, but you know, if there's like three opening up within your mile radius, so all of a sudden it's not a good business. And we're finding more and more of that, that, you know, something that was a very, very good business, very, very steady business with excellent customer dynamics and low customer acquisition costs is all of a sudden beginning to look like a much, much worse business because so much money has piled in. And you don't get to see that, right? I mean, they're sitting there, these are private companies, and all of a sudden, you know, they have lots of locations and lots of revenue, and you know, competition just works over the long term.
There are even publicly traded companies that have private equity components, like an old name of ours, Planet Fitness, right?
Came undone this year because it was private equity companies owning the gyms, and they felt the need to expand, but the unit economics were terrible, and they cut back on the expansion and the growth story fell apart. And so private equity works its way in interesting ways into some of these companies. Are you looking at any of the private equity sponsors or the BDCs?
Well, we're looking at those too. There's some, you know, obviously some very, very interesting numbers out there. If you look at, you know, what the street expects for assets under management for many of these companies is just, you know, these are like enormous numbers.
I think Brookfield has over $1 trillion of AUM with negative tangible equity, right? So I mean—
Just to kind of size that, right, you know, the entire high yield market in the United States is $1.5 trillion, right? So, you know, all of a sudden you have these companies that are going to trade more, you know, they're going to manage more than, you know, the high yield market, right? So that's very, very interesting to us. And I think, you know, obviously there is no underlying accounting, these companies are not lying, but what's interesting about that is just, you know—
