Cache Long/Short: A Client Case Study, Five Months In
Published Updated
Srikanth Narayan
Founder and CEO
Why did we build Cache Long/Short? Because we don't think concentrated stock is a one-product problem. Cache Long/Short can provide investors with more flexibility, while reducing concentration risk and harvesting losses to offset gains along the way.
If you’re new to the concept of long/short strategies, check out our Complete Guide to Tax-Aware Long/Short Investing.
The Setup
In late March, I funded my account with roughly $1M of assets: a portion of my concentrated UBER position, a highly appreciated GLD position, and several ETFs and cash as collateral.
I worked at Uber from 2014 to 2020. My earliest Uber grants from stock options were highly appreciated, and I used the Cache Exchange Fund to diversify some of these holdings. Ongoing grants, issued as RSUs, had a higher cost basis, making them well-suited for Cache Long/Short.
That distinction matters. We often hear investors talk about concentrated stock as though it were a single position. In practice, different lots can have very different tax characteristics. The right strategy for deeply appreciated options may not be the right strategy for ones with higher bases.
My Cache Long/Short Portfolio
By early September, about five months in, the portfolio held roughly $1.5M across about 980 positions, running a 130/30 long/short strategy benchmarked to the S&P 500. That includes $300K of cash I added along the way, including cash added at the beginning of September.
Tax-efficient Diversification
The Uber position is essentially gone: down from 6,647 shares ($465K) to 43 shares, a 99% reduction across 10 sales. The largest, 4,742 shares, came on the first day; the rest followed between April and June. GLD went from 108 shares to 1 over seven sales. Together, those sales realized about $218K in long-term gains. The purpose of the strategy was to generate losses elsewhere in the portfolio that could offset those gains.
Across 2,047 trades, the strategy harvested $193.6K in losses. More than half of that, about $113K, came from short positions. Every gain realized from selling UBER and GLD was long-term, and every harvested loss was short-term. That's generally the most valuable tax outcome.
The Benefits
After five months, net realized gains came to about $40K, against roughly $218K of long-term gains from selling UBER and GLD. As of early September, the strategy still had the rest of the year to continue harvesting.
Given my legacy holdings, performance is compared against an adjusted benchmark that factors in these weights. From March 26 through September 2, the account was up 18.6% after tax, compared with 10.8% for the adjusted benchmark. Before tax, it was up 13.2%, behind the adjusted benchmark's 16.4%. The tax-loss harvesting didn't require stepping out of the market.
Over the first five months, the strategy generated roughly $37K of losses per month on average, ranging from about $22K in August to about $53K in July. Future loss generation will depend on market conditions.
One common misconception is that tax-loss harvesting eliminates taxes altogether.
It does not.
The gain is simply deferred rather than eliminated. My portfolio began with roughly $411K of embedded gains. After five months of realizing gains, harvesting losses, and remaining invested, it still carried more embedded gains than it started with. The value comes from when and how those gains are recognized.
Over five months, more than $500K of concentrated UBER and GLD exposure moved into a broadly diversified portfolio, while the strategy harvested meaningful losses along the way.
Running the strategy in my own account reinforced something we've long believed: concentrated stock is rarely a single problem with a single solution. In my planning, my earliest Uber grants were better candidates for an Exchange Fund. Later RSU grants proved well-suited for Long/Short.
Different lots call for different tools.
If you're weighing how to manage a concentrated position, you can model your own situation with our Long/Short calculator, learn more on the Long/Short product page, walk through the live dashboard of a demo account, or talk to our team.
The 18.6% after-tax and 13.2% pre-tax returns reflect the performance of a single account from March 26, 2026 through September 2, 2026 and should not be considered representative of any other investor’s experience or expected returns. Results reflect the specific holdings, funding sources, and timing of one portfolio and will vary for other investors. Past performance is not indicative of future results. Results are net of a 0.25% annual management fee (as the account had a promotional rate) and average borrowing costs of approximately 0.29% per year; expenses for portfolios with higher leverage may be greater.
The Cache Long Short Program is managed by Cache Advisors LLC, an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). Registration with the SEC does not imply a certain level of skill or training. Cache Advisors LLC is a wholly owned subsidiary of Cache Financials, Inc.
Mr. Narayan is the Founder and CEO of Cache Financials, Inc. His compensation and the value of his ownership interest in the company may depend on the revenues of Cache Financials, Inc. and its affiliates, including fees paid by clients of the Cache Long Short Program.
Certain assets within the Cache Long Short Program may be sub-advised by Brooklyn Indexing (“Brooklyn” or “BKLN”), an SEC-registered investment adviser and a trade name of Nuveen Asset Management, LLC that is not affiliated with Cache or its affiliates. Assets associated with the Cache Long Short Program are custodied at Charles Schwab & Co., Inc., a member of SIPC. Neither Brooklyn Indexing nor Charles Schwab & Co., Inc. is affiliated with Cache or its affiliates.
Long/short investment strategies involve additional risks beyond traditional long-only strategies, including risks associated with leverage, borrowing, short selling, increased portfolio turnover, and heightened volatility. These strategies may result in losses that exceed those of more traditional investment approaches, including losses in excess of your initial investment.
Long/Short Leverage Disclosure: 130% refers to the target long exposure ratio while 30% refers to the target short ratio. While the portfolio seeks to achieve this target, it is not guaranteed. Larger long/short extensions also increase leverage and risk, including the risk of losses that can exceed the amount invested. Greater extension is not inherently better and is not suitable for every investor.
Any references to objectives, targets, transition plans, or tracking error estimates are based on historical assumptions and estimates and are not guarantees of future results. Actual results may differ materially. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Cache Advisors does not offer financial planning services or asset allocation recommendations; any recommendations are limited to the leverage ratio discussed in the Form ADV.
The S&P 500 Index: a market capitalization-weighted index composed of 500 leading U.S. publicly traded companies, widely regarded as a gauge of the large-cap U.S. equities market.
Additional information regarding the Cache Long Short Program, including its investment strategies, risks, fees, and expenses, is available in Cache Advisors LLC’s Form ADV.
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