Aureon Bangkok Capital DiscoveryABCD Fund
Crisis Opportunity
Eclipse seeks long-term capital appreciation from fundamentally sound or credibly improving businesses mispriced during temporary crises or market dislocations.
Compare Eclipse and NovaA severe price decline alone is not an investment thesis.
Eclipse looks for a temporary dislocation with credible business survival, a realistic recovery path and a price that leaves room for uncertainty. This includes improving businesses and credible turnarounds, as well as businesses whose underlying quality remains intact.
Price declines of approximately 50–99% provide context for the crisis situations we research. The size of the fall is a starting point for investigation, never a sufficient reason to buy.
Permanent impairment, unrecoverable governance failure and structural decline can make a low price misleading. The distinction rests on evidence about the business.
The price can look compelling long before the outcome becomes clear.
Forced selling, liquidity stress and fear can push prices away from business value. But the same falling share price can also signal a business that will never recover. Distinguishing the two requires judgement while information is incomplete and uncertainty is high.
Even a surviving business may need years to recover. Further declines can test both the investment thesis and the ability to keep holding. A cheap entry price does not remove the risk of permanent loss.
16%
Of stocks with a 95–100% maximum drawdown. Among those that recovered, the average time from trough to that high was eight years.
Historical context, not Eclipse performance or a forecast. The study excludes companies delisted for cause or bankruptcy, ADRs and stocks below its size threshold.
By maximum drawdown · U.S. stocks, 1985–2024
| Maximum drawdown | Average peak to trough (years) | Recovered to prior high | Average trough to prior high (years) |
|---|---|---|---|
| 95–100% | 6.7 | 16% | 8.0 |
| 90–95% | 4.3 | 37% | 5.8 |
| 85–90% | 3.7 | 42% | 4.6 |
| 80–85% | 3.2 | 49% | 4.2 |
| 75–80% | 3.1 | 54% | 3.8 |
| 70–75% | 2.5 | 62% | 3.4 |
| 65–70% | 2.3 | 67% | 3.2 |
| 60–65% | 1.9 | 67% | 2.5 |
| 55–60% | 1.7 | 74% | 2.2 |
| 50–55% | 1.4 | 77% | 2.0 |
| 0–50% | 1.0 | 80% | 1.5 |
Prior high means the price at the start of the maximum drawdown. Prices are intraday; the sample covers NYSE, NASDAQ and NYSE American stocks that continued trading after their maximum drawdown and reached a market capitalisation of at least US$1 million in 2024 dollars at a month-end. Recovery times describe only stocks that returned to their prior high.
Source: Counterpoint Global and FactSet, Drawdowns and Recoveries, Exhibit 4 (May 2025).
Durability. Divergence. Asymmetry.
These three lenses help us distinguish an investable crisis from a value trap. They bring together business survival, evidence the market may be overlooking and the relationship between upside and downside. They guide our judgement; they do not guarantee recovery.
Is this a price crisis or a business crisis?
We examine whether operations, the balance sheet and the competitive position can withstand the stress. A collapsing share price and a permanently damaged business are different problems. Where the business itself is in crisis, we look for credible evidence of stabilisation or improvement.
What does the real world show that the share price does not?
We look for contradictions between the market’s expectations and evidence from the business: operating developments, customer and industry information, financial results and the recovery path. A different opinion matters only when there is evidence to support it.
Does the potential reward justify the remaining risk?
We assess the margin of safety at the entry price, the value that recovery could realise and the downside if the thesis is wrong. The reward-to-risk ratio compares plausible upside with possible loss, rather than treating a return to the old share-price high as inevitable.
These lenses inform our Investment Process: Opportunity Screening, Deep Discovery Research and Valuation Realisation. Explore the process
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We use these inputs to find opportunities, challenge assumptions and investigate the business behind the share price.
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Indonesia · SILO · February 2017–December 2023
An educational market-history example prompted by Suthon’s personal investing experience. The chart shows the listed company’s share price, not ABCD or Eclipse performance, or a reconstruction of his transactions.
In October 2018, a bribery investigation into permits for Lippo Group’s Meikarta property project added to pressure on the group’s listed companies, including Siloam. The hospital operator’s association with Lippo put group-level governance and financial concerns alongside the question of how its hospitals were actually performing.
The investment question was whether those concerns meant lasting damage to Siloam’s business, or whether the share price had fallen further than its operating prospects justified. Patient demand and hospital activity needed to be assessed alongside ownership, financing and governance risks.
Historical context: Reuters, 18 October 2018; Liputan6, 19 October 2018. The investigation concerned the property project. SILO’s decline had begun before October 2018; this event does not explain the entire fall shown below.
The decline into crisisThe longer view shows the fall from 2017 into the October 2018 low, before the subsequent recovery.
A recovery with setbacksThe 2020 retreat interrupts the recovery. The later price rise could not have been known at the outset.
Source: Yahoo Finance, SILO.JK daily history, retrieved 8 September 2026.
A retrospective illustration of the three lenses, not an original dated research note. Full-year 2018 disclosures became available after that year ended.
Operating facts: Siloam 2018 Annual Report, pp. 19–20. This is a selected historical example viewed with hindsight, not evidence of typical outcomes or a recommendation to buy SILO.
Hold for recovery. Seek cash flow along the way.
Options and share lending can contribute during the holding period.
Including covered calls
Obligation to buy if assigned
Securities lending · SBL
Use depends on the position and market conditions. Shares on loan are not assumed to be available to cover a call.
Call writing, including covered calls against shares held in the portfolio, earns option premiums. A covered call exchanges some potential upside for income during the holding period.
The shares can be called away, and equity downside remains. An uncovered short call has a different risk profile, including potentially unlimited loss.
Put writing earns premiums in exchange for taking on an obligation to buy shares at the agreed strike price if assigned. It is another way the strategy can generate option cash flow.
Assignment can require additional capital when a stock is falling. Losses can substantially exceed the premium received.
Lending eligible portfolio shares to borrowers earns lending fees during the holding period. This adds a potential source of cash flow from stocks the portfolio continues to have economic exposure to.
Income depends on borrowing demand and lending terms. Counterparty failure and problems recovering the shares or realising collateral can cause losses.
Cash inflows are not guaranteed net returns. Costs and investment losses can outweigh premiums and fees.
Crisis equities remain the principal return engine.
Tactical instruments and cash support the equity mandate. Covered options may overlap with shares already held; securities lending also uses portfolio holdings rather than representing a separate allocation sleeve.
Allocation ranges, not current portfolio weights.
Cash may exceed its normal range when opportunity or risk conditions warrant. Ranges move with the opportunity set and are not fixed weights or a current allocation.
Research continues through the holding period. Eclipse does not publish a numerical portfolio drawdown limit or offer capital protection.
Eclipse reduces or exits when fair value is reached, the thesis completes or breaks, business quality worsens or capital has a better use. Decisions remain thesis-based, with no fixed maximum holding period while the case holds.
Published research related to the strategy.
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