Jazzi Young's avatar
$9.7m follower assets
What I Learned from Trading: Asymmetric Payoff
The asymmetric payoff is one of the most foundational principles of our investing and trading strategy. Asymmetry was always implicit in our investing process, but learning to trade brought that principle to the front of our conscious minds. It’s now the focus of everything we do in our "investment operations". Any investment activity or rule that doesn’t contribute to an asymmetric payoff is deemed superfluous and unceremoniously dumped. We scrutinise everything we do because time is valuable and there’s no time to waste.

In geometry, symmetry refers to a shape that’s the same on both sides of a central dividing line, also known as the mirror line. The following shapes are symmetrical:

In investing, symmetry usually refers the 1:1 relationship between risk and reward. A symmetrical payoff is when you risk $1 for the chance to make $1. Risk and reward are inextricably linked when it comes to games of chance. You can’t earn monetary reward without risking capital. Symmetrical payoff is a low bar if you’re a long-term investor. Asymmetrical payoff is the aspiration.

The English Oxford dictionary defines asymmetry to be:
"lack of equality or equivalence between parts or aspects of something; lack of symmetry"

Symmetry and asymmetry can be pictorially represented as follows:
In investing, symmetry usually refers the 1:1 relationship between risk and reward. Symmetrical payoff is when you risk $1 for the chance to make $1. Risk and reward are inextricably linked when it comes to games of chance. You can’t earn monetary reward without risking capital. Symmetrical payoff is a low bar if you’re a long-term investor. An asymmetrical payoff should be the aspiration.

The English Oxford dictionary defines asymmetry to be:
"lack of equality or equivalence between parts or aspects of something; lack of symmetry"

Symmetry and asymmetry can be pictorially represented as follows:

Asymmetry is more than just a visual cue. It can appear whenever we compare inputs to outputs. Asymmetry works in both negative and positive ways. The Pareto Principle is a direct manifestation of asymmetry: 20% of your inputs are responsible for 80% of your outcome. The relationship between inputs and outputs isn’t always linear.

For example, you invested in McDonalds stock 20 years ago at the beginning of 2002, you would have purchased it at around $26.49 per share. By the beginning of November 2022, the stock price had risen to $272.95 per share, a multiple of more than 10. If we think of it in terms of a risk multiples, we put our entire purchase of $26.49 per share at risk to and earned the following long-term reward:

The R Multiple tells us that we made a profit that was 9 times the capital we risked (9R). This is the return asymmetry in action, and this doesn’t even include the dividends paid out to shareholders. Over the 20 year period, the total dividends amounted to $56.32 per share.

The following chart shows the meteoric growth of the McDonalds ($MCD) stock price in percentage terms. If we include dividends received as cash (but not reinvested), we can also plot total return.

I deliberately chose McDonalds because buying this stock didn’t require any special predictive foresight or stock picking superpower back in 2002. McDonalds was a mature stalwart of the consumer discretionary sector and one of the 30 constituents of the Dow Jones Industrial Average index (DJIA). It wasn’t viewed by the market to be the next big growth stock like Apple, Google or Netflix. It was just a well-run, well-branded burger-flipping operation (and stealth retail estate business) that was instantly recognisable to everybody.

The McDonalds example proves that asymmetric reward doesn’t require perfect market timing or getting into the next big growth stock at the ground level. However, it does require hopping on board a long-term success story and staying the course. You have to let your profits run to capture an asymmetric payoff. There’s an old trader saying "be right big, be wrong small". If you sell to crystallise your gains because you’ve reached some profit target, you’ll always truncate your gains and might never achieve life-changing, multi-bagger returns. Asymmetry requires you to "let your winners run".

Picking winning stocks isn’t the only strategy to generate lucrative reward asymmetry. All long-tenured investors know how difficult it is to consistently pick winners in the stock market. We can achieve return asymmetry by dollar cost averaging into a broad market index fund and holding for multiple decades. It’s a simple turtle-paced strategy that works if you give it enough time. You have to be consistent, patient and stedfast in a systematic dollar cost averaging process for a very long time.

Consider the growth of one of the oldest and most popular ETFs tracking the S&P 500 index: SPDR S&P 500 ETF (Ticker: SPY). If you had bought shares in SPY at the inception of the fund, you would have paid about $44.25 per share. By the beginning of November 2022, that share price had grown to $384.52, more than 8 times your initial investment. This is a 7R asymmetric return on price alone. During that holding period, you would’ve had to endure the following bear market drawdowns:

  • 49% drawdown during the Tech Wreck of 2000
  • 56% drawdown during the Global Financial Crisis of 2007 to 2009
  • 34% drawdown during the 2020 Covid-19 pandemic
  • 25% drawdown during this current 2022 bear market

We know that dividends are an important component of total return. Compounding really kicks in when those dividends are reinvested. Total dividends paid over the period amounted to $85.02 per share. If those dividends were reinvested, your portfolio would have grown to over 14 times your initial investment.

It’s not enough to recognise when an asymmetric opportunity presents itself, it’s equally important to identify the key drivers and mechanics that produce that asymmetry. In other words, we need to know how that investment is going to become a multi-bagger, including your own conduct from a behavioural standpoint. If you know how the expected reward will be earned, you’ll more likely to stick to the plan long enough to see it happen. This can be as little as being patient enough to give the investment the necessary breathing space to do its job. There’s also a good chance you’ll need a holding period of years, or even decades to capture the full asymmetric reward on offer.

In the case of McDonalds, the business thesis back in 2002 was predicated on several factors: international expansion, continued strong brand awareness, introduction of all day menu offerings, expansion of drive-thru, extended hours and resiliency during economic downturns through value offerings like the dollar menu. This business doesn't sell some new, disruptive product that revolutionises the way we live, so asymmetry of return was always going to be achieved through steady growth over a long period of time.

Most long-term retail investors use their temporal edge (time horizon advantage) to achieve 5R, 10R, 20R, 50R, 100R returns. Investors can hold a market index fund or winning stocks or for a very long time to let compounding work its magic.

In trading, I was taught to abandon profit targets and let the market take you out of a winning trade (trailing stop loss). In other words, successful traders also let their profits run. It's a common theme shared by successful traders and investors. Traders open a stock position on price action, give the position some breathing room to ride out the routine day-to-day noise using volatility-based stops and close out the position when the price action turns conclusively adverse. The entry and exit criteria are congruent because it’s based on the same factor.

Long-term investors who buy a stock predicated on a business thesis should base their exit criteria on that thesis being broken. The original thesis can evolve as the business evolves over time, but the exit should be down to business impairment reasons rather than on any short term price weakness. Price weakness can trigger a review of your business thesis, but it shouldn’t be the prime consideration to sell out. The same factor that got you into the stock should be the factor that gets you out. This ensures congruence in your process and we believe this idea to be very important. If you buy a stock on business considerations but decide to sell because you’ve reached some arbitrary profit target, your entry and exit criteria isn’t congruent. You could leave a lot of profit on the table if the business continues to prosper.

Successful long-term investors apply the "slight edge" philosophy and let a quality business successfully executing their mission the necessary breathing space to time to hopefully earn a multi-bagger return (capital gain + dividends). Asymmetric payoff is what gets you to financial freedom. For us, if the investment opportunity has no expectation of an asymmetric payoff, then the opportunity is a hard pass. We don’t day trade, apply for an IPO to stag profits or trade option spreads.

Asymmetry is a theme that will run through a lot of what we talk about in our future posts.
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The same factor that got you into the stock should be the factor that gets you out- this line resonated a bit to me as I review my losses and mistake the past year (in light of the Givernian Rochon tradition)

Thank you again @jazziyoung another fantastic read!
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Logical Thesis's avatar
$19.6m follower assets
Reflecting on my Portfolio YTD
Hi all,

This year has not been easy for many growth equity investors, myself included. I've made many adjustments throughout the year to best position myself for this point in the cycle.
First, here is a screenshot of my current portfolio:

I consolidated my portfolio to my highest conviction names. People may find holding just five stocks a bit too risky, but on the contrary, it's easier to keep up with the businesses when there are fewer of them. The names in my portfolio are all growing double digits (upwards of 30%) and, most importantly, are profitable. This is key to what my strategy is now. Growth at a reasonable price (GARP) and profitable.

I have two buckets of stocks among these five:
• High growers with higher P/E: $EVVTY $XPEL (~30% growth ~30 PE)
• slower growth with lower valuation: $PUBM (15% growth at 6X EV/EBITDA, 10X FCF), $LEAT (8 PE and taking market share amid an industry slowdown), $AEP.V (3X EBITDA and buying back shares until closer to fair value)

I used the downturn to swap what I consider riskier positions/lower conviction holds for the names above which feel easier to hold through an economic downturn (given confidence in the business model to generate cash flows). I invest in a taxable brokerage account which means:
  • I was able to take advantage of realizing losses for future tax advantages
  • I was able to take advantage of a bear market, where other equities I swapped to were also in drawdowns/undervalued

Here are a few of the lessons I learned and I hope they will help readers as they think about their future investments and protecting their downside.
Below are stocks/situations which resulted in majority of my 2022 losses. I ditched many names rather quickly as the economic cycle turned:

• cash burning biotechs like $NAUT $SLGC - it's clear to me proteomics will be the future but how long until their technology is mass adopted and how much cash will they burn until then? I'm almost certain I will regret selling out of this sector, but I realized that although the general thesis of proteomics (next evolution of gene sequencing) will be the future of medicine, I'm not a biologist and cannot determine which company(s) will have superior technology. In this instance, it may be better to take a basket approach, but even then, it's a tough time to be burning cash and potentially having to raise cash. Both these names have sufficient cash to survive for years but I preferred to hold simpler to understand businesses. My second largest realized loss of the year was $SLGC, holding it through nearly the entirety of its drawdown before selling.

• this brings me to another point: don't price anchor. It doesn't matter how much you are down so far, it matters what the stock will do moving forward. You don't need to make your money back the same way you lost it. In fact, it's likely it won't be made back the same way.

• another reason I lost big this year was buying the hype of SPACs. $SLGC was a SPAC. So was $ME (another major loss for me from a cash burning biotech, though I took most those losses in 2021). We have to remember that during SPACs, IPOs, spin-offs, the insiders who know the most about a company are selling you something. They know the ins and outs, the future outlook, and most importantly, the value of the business. During heightened valuations of the markets, I highly recommend to steer clear from IPOs in all forms. Wait for stock prices to reset. Don't let your emotions and FOMO trick you into big losses.

• another issue with $ME was diworsification (Peter Lynch term). They realized their therapeutics programs burn cash rapidly so they needed self-funding methods. Their test kits were not generating enough $ and slowing down. They moved into primary care, which was the CEO's plan to have genetics-driven healthcare. This is yet another cash-burning outlet which will take years to grow (if it does). Dilution here is highly likely. I exited once I realized the cash burn rate increasing further.

• unprofitable businesses (especially retailers) like $TUEM $BTTR caught me off guard. These may have worked better in a low rate environment and a high demand for goods environment like we saw during Covid. But without profitability, they're either forced to take on debt or dilute shareholders (and more so if the stock price is dwindling). If a company isn't profitable, you need to have a margin of safety on the balance sheet. These companies touted great growth ($BTTR) and turnaround potential ($TUEM), but I failed to respect risk. Because of this, I took my biggest loss on $TUEM. I thought I was smarter than the market. The turnaround story made a lot of sense. $BURL execs in place, activist hedge fund, incentives were aligned with shareholders. But I failed to consider the bear case. And the bear case was not reaching escape velocity, e.g. implosion. Investing is a game of probabilities, and our position size should be determined by the downside, not the upside. I can't stress this point enough. If a stock has a chance of going to 0, the likely bet size is $0. Take the downside into consideration. Make bets accordingly.

• my biggest learning yet, because it hurts my soul on a personal level is: don't give stock tips to family members and friends. No good deed goes unpunished. My genius and naivety led me to talk too much about $TUEM in front of family members and friends. It seemed so obvious at 0.5x sales. What could go wrong? Oh, demand could fall off a cliff, their balance sheet could pose too much risk. Valuation tied to the income statement isn't enough, you must consider the balance sheet.

• which leads me to my final learning. What's cheap can always get cheaper. If you thought $TUEM at 0.5X sales was cheap, wait til you can buy it at 0.05X sales. Great bargain, right?... Right??

All in all, it's best to buy profitable companies with a margin of safety on the balance sheet. Avoid speculative situations (assuming it will play out how you think it will without the track record). Avoid the 'too close to call' situations. Don't FOMO at peak valuations. You may make money, but it's equally likely you lose more money. Avoid mediocre business models. Diversifying in 20 mediocre businesses is not reducing risk.

I hope my memo provides valuable learnings and helps fellow investors protect their downside.
Be careful out there and happy hunting!
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StockOpine's avatar
$42.7m follower assets
“International investing is about companies, not economies”
As per Capital Group:

“There’s a big difference between top-down macroeconomic conditions and fundamental, bottom-up prospects for individual companies. More than ever, company-specific events are driving returns, placing added importance on deep investment research and individual stock picking.”

Source: Capital Group

Other important insights mentioned in the article:
1) Strong US dollar won’t last forever.
2) Dividend opportunities are greater outside US.

3) The new economy depends on old industries.
4) Not all the best stocks are in US, by a long shot.

Source: Capital Group

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Great article and summary of their points. Investing outside of the US for me has been a revelation. Finding great businesses like $ADYEY, $BAM, and $TOITF for example. Home bias is hard to overcome.
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Devin LaSarre's avatar
$20.8m follower assets
WhatsApp: Meta's Next Growth Engine
WhatsApp is one of the largest platforms in the world and is quite possibly Meta’s most underappreciated asset.

But the crazy thing?

It nearly failed.

The backdrop

WhatsApp was created in early 2009 by two former Yahoo! employees, Brian Acton and Jan Koum, who saw a massive opportunity in the fledgling mobile market after the launch of the iPhone. Their idea was to create an app where you could attach status updates for your address book to see, including if you were on a call on your device, busy in a meeting, etc. But in the early months, continual technical troubles and a lack of overall appeal led to only a handful of downloads.

That changed when Apple launched push notifications; allowing users to see status updates from others even when not actively using the app. People began to use WhatsApp as an instant messenger. That’s when Brian and Jan saw the opportunity to pivot. In August 2009, focused entirely on messaging, the duo launched a new version of the app, and active users quickly jumped to over 250,000.

WhatsApp’s user base continued to grow as it climbed the ranks of the App Store; catching the eye of the rest of Silicon Valley. In 2010, Google met with the founders, and upon seeing the potential, they quickly made a $10 million offer for WhatsApp. The founders just as quickly said no. Several months passed, and Google increased its offer to $100 million. Brian and Jan passed a second time.

But as the app grew, so did costs, and the company needed money. WhatsApp was converted from a free service to a paid one, in which users would pay a one-time fee of $.99. Not only would this generate essential revenue but it would help slow down growth to a more manageable level.

It wasn’t enough.

In early 2011, after months of negotiation, Sequoia Capital invested ~$8 million for ~15% of the company. Within two years, monthly active users had crossed 200 million, and Sequoia invested another $50 million, valuing WhatsApp at $1.5 billion. The company also changed its model from a one-time fee to free upfront with a $.99/year subscription thereafter. But that didn’t slow the company down, and by the end of 2013, monthly active users had doubled to 400 million.

It was only natural for this to alarm Facebook, which for the past several years had been navigating its own shift to mobile. However, seeing an opportunity, Facebook decided to open its war chest rather than go to war. On February 19th, 2014, Facebook (now Meta) acquired WhatsApp.

The purchase price?

A jaw-dropping $4 billion in cash, ~$12 billion in Facebook shares, and ~$3 billion in restricted stock grants set to vest over a 4-year period. In total, due to share price appreciation, the company paid well over the initial price tag. It would be the largest venture-backed acquisition ever done and completely dwarfed Facebook’s $1 billion acquisition of Instagram two years prior.

But the deal was easy to criticize. For the full year of 2013, WhatsApp generated a mere $10 million in revenue and recognized a net loss of $138 million. Paying >$22 billion for a loss-generating business doesn’t sound great. However, justification lies in the fact that in one single move Facebook was able to acquire a huge number of users and their personal information, and all but guaranteed it retaining its spot on the top of the mobile mountain. After all, the company had spent the last few years shifting its focus to mobile, and losing future growth to a would-be competitor would be much more costly. This was affirmed during the Q3 2014 call (half a year after the deal announcement), as per Mark Zuckerberg’s comments (emphasis added):

"Part of what we've seen is that the use cases for products like Instagram and WhatsApp are actually more different and nuanced from -- than the products that the people compare them to, that Facebook had already built. So for example on the WhatsApp and Messenger side, Messenger's primarily used today for people to chat with their Facebook friends, within this context of, maybe it's not like a real-time text, like you would send an SMS on your phone, but it's something that you're sending to one of your Facebook friends, then if they happen to be there, and then you can text back and forth, or maybe they respond later. SMS and WhatsApp are more for kind of real-time activity. People have contacts on WhatsApp who they wouldn't want to make friends on Facebook, the graphs there are somewhat different. So one of the things that we found, interestingly, to us as well, was that Messenger and WhatsApp were actually growing quickly in a lot of the same countries."

To further appreciate the risk Facebook faced requires looking at what led to WhatsApp’s rise in the first place.

WhatsApp’s growth engine

WhatsApp was created with privacy in mind, with all of its services utilizing end-to-end encryption. Its team also vowed to provide a seamless user experience that would never be cluttered with ads. But the real success of WhatsApp can be attributed to one driver:


WhatsApp was developed to be platform-agnostic and with a mobile focus, making it compatible with nearly all smartphones. It has also always been free to send and receive messages through WhatsApp, which is critical in countries where consumers can’t afford plans where they are charged for messaging. And instead of signing up and creating a username and then asking people for their username to connect, you simply used your mobile number. These factors made WhatsApp not only easy to use but also outrageously affordable, especially for those in developing countries who began to see it as the way to communicate. But there was still one barrier to entry: payment. However, in January 2016, WhatsApp scrapped the annual subscription fee, making the app completely free for users. Since then, the achieved network effect has been awing:

WhatsApp's monthly active users are still widely cited to be ~2 billion. However, that number was reached in early 2020. Similar growth has likely occurred with the number of messages sent per day on the platform, growing from ~100 million/day in October 2020. In fact, the present number of daily active users is greater than the monthly active users from just two years ago, as Mark Zuckerberg on the Q3 2022 call stated:

"WhatsApp has more than 2 billion daily actives, also with the exciting trend that North America is now our fastest-growing region. Across the family, some apps may be saturated in some countries or some demographics, but overall, our apps continue to grow from a large base."

Meta does not break out WhatsApp from the rest of FoA but the above comment should catch your attention. At over 2 billion, WhatsApp DAUs are larger than that of any other social media platform, including Facebook’s 1.984 billion as of Q3 2022. Additionally, the platform sports strong demographic mixes, including nearly half of the users estimated to be between ages 15-35:

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This was a great post. I wonder how the narrative would be different if the company said this was its biggest near term focus (while also putting more investment dollars to it) while Reality Labs is a long-term focus (while putting less dollars to that segment)?
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Leon's avatar
$18.6m follower assets
Portfolio Recap 2022
2022 was a challenging year. I've learned a lot, especially regarding my strategy and investment criteria I want to focus on in the future. I already outlined these criteria in my last substack.

I owned 38 different stocks this year. This is way too high for me. Especially in 2020 & 2021 I've bought many stocks that did not really fit into my strategy and that's why I used the current bear market to concentrate the portfolio more on my higher conviction ideas.

But let's take a closer look into what has happened in my portfolio during the year:

The 13 stocks below are the ones I already owned at the beginning of the year and also currently own. All my Top 5 holdings are included in this list ($EPSIL.AT, $EVVTY, $YSN.DE; $KSPI, $LEAT). As I consider myself a long-term shareholder, this list should be longer.

These 3 stocks were bought in 2022 and also directly sold after just a short time period. Regarding $SPOT I realized for example that the main reason why I bought it was, that I love their product. But just loving the product doesn't mean that it's also a great stock to invest in.

I bought 9 new stocks in 2022, that are still part of my portfolio. I hope that I can own these stocks for a long time. But my strategy is not just to Buy & Hold. You should not forget to Check your holdings from time to time. When I realize that my original investment thesis for the company is not intact anymore, I'll have to sell it. Part of my $VOW.OL thesis is for example, that they're able to secure a new big contract for their pyrolisis solution in the coming quarter. When I realize that they're not able to do so, I have to re-evaluate my thesis again.

I have sold the 13 stocks below this year. As already said, I've bought too many stocks where my conviction was not that high during 2020 & 2021. Stocks like $TCEHY, $BABA, $SE, $U don't really fit my strategy which focuses on underfollowed small caps. Others like $MYNA or $SEYE are unprofitable and I realized that my conviction in unprofitable companies is not that high in a bear market. So in the future, I want to focus on profitable companies and will not experiment with high-risk bets.

All in all the turnover in my portfolio was too high this year. But the number of stocks has been too high. I bought too many stocks, that didn't fit into my strategy during the hot phase of the bull market. I used this year to correct these mistakes and in the coming year, I will probably continue to do so. I want to further increase the hurdle rate for new companies and more rigorously sell shares that no longer meet my requirements. By improving this process I hope that the list of the "winners" (stocks I own for many years) will become longer over time.
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I like how you are trying to realign with your strategy. I see a lot of CS users talking about the mistakes they've made over the year. I appreciate the openness. We can all learn from each other.
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Phil Fisher’s 15 Points
Warren Buffett famously said he is 85% Benjamin Graham and 15% Phil Fisher.

Here are Phil Fisher’s 15 Points to Look for in a Common Stock
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All stocks acquired in this year's crash.
rate my portfolio out of 10
22%= > 9
9 VotesPoll ended on: 12/4/2022
Not a fan of Square, Netflix. Not too fond of Adobe after the horrendous Figma acquisition and can't say much about LULU, DDOG and Marketaxess. Overall a lot quality, 7/10
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Finding 100-Baggers 101
Over the past 3 years, I've spent hundreds of hours trying to reverse engineer the attributes of companies that can 100x your money.

Here are 7 critical characteristics to look for on your hunt

Intention To Get One

Most people spend time searching for them but are unable to withstand the peaks and valleys of long-term ownership

Focus on fundamentals, not the stock price.

Holding companies as they compound will allow you to get closer to 100-bagger territory!

Quality Growth

Too many investors focus on revenue growth that doesn't translate to earnings or free cash flow growth.

Instead, focus on finding companies growing earnings/free cash flows at sustainably high rates.

Reinvestment opportunity

If you focus on dividends, you can succeed, but finding a 100-bagger will be unlikely.

Instead, you want a company that can reinvest earnings back into the company at high rates of return.

Hold onto a business that can do this, and relish the results.

High ROE

Finding businesses that have one-off high ROEs isn't difficult to find.

Maintaining a high number is more important than 1-time increases.

This ensures that returns continue to compound rather than decelerate.

Decelerating returns are the kryptonite of 100-baggers.

Great Management

Too much analysis briefly covers management history.

Instead, find out what management is doing to boost the company's operations.

Great management + great business = the holy grail of investing according to Charlie Munger.


Learning company culture is one of the hardest parts of analysis, so most investors skip it.

Instead, look at the following to identify a kick-ass culture:

• High insider ownership
• Great relationships
• Long employment tenure

All these points to a winning culture


Companies incentivized to focus on the short term are not your friend.

They sacrifice the long term for short-term.

100-baggers require the opposite approach: sacrifice the short-term for long-term fundamentals.

A 100-bagger should never sacrifice the long-term.
2022 - A Year in Review
2022 has been a very challenging year as an investor. I was hit with the double whammy of a tumultuous market and inability to maintain regular contributions. Life happened - continuing to adjust to a new house, new job(s), new city as well as a rising inflationary environment affected our ability to contribute.

Although I did not achieve some of my goals for 2022, there are many takeaways from this year:
  1. If I can manage this level of volatility and be unaffected, I will be set up to be a long term buy and hold investor
  2. Maintaining a process to guide through difficult times is essential
  3. Setting less-specific goals to help with mental blocks when goals aren's being reached

Now for the investing-specific goals I set for myself in 2022:


Routine Roth Contributions: 2/26 ❌
Routine Taxable Contributions: 2/26 ❌
2021 Max: $2,180 ❌
2022 Max: $50 ❌
Roth Dividends: $157.54 (through November) ✅
Taxable Dividends: $389.85 (through November). Will reach target with confirmed December dividends ✅

Portfolio Changes:

Below is my current verified portfolio mix and a comparison to my portfolio allocation compared to my January Portfolio Reviews:

Taxable Top 5
  1. $CMA (13.8%)
  2. $VTI (12.4%)
  3. $VEA (7.8%)
  4. $VWO (5.4%)
  5. $TGT (4.8%)

December 2022
  1. $CMA (11.1%)
  2. $VTI (9.5%)
  3. $VEA (7.3%)
  4. $PFE (4.8%)
  5. $VWO (4.7%)

Roth IRA Top 5
  1. $VTI (12.4%)
  2. $VNQ (11.5%)
  3. $SBUX (9.7%)
  4. $VIG (8.9%)
  5. $HD (8.0%)

December 2022:
  1. $VTI (11.9%)
  2. $SBUX (11.2%)
  3. $VNQ (10.2%)
  4. $VIG (9.2%)
  5. $HD (7.6%)

Finally, I want to review my portfolio performance vs my benchmark of the S&P 500:

Taxable (YTD): -7.5% ✅
S&P 500 (YTD): -18.6%

Roth IRA (YTD): -13.7% ✅
S&P 500 (YTD): -18.6% (Had issues getting my S&P trend to plot)

Overall, this has definitely been a challenging year. My portfolios are down and the markets are down. However, I am down less than the market. I am thankful to have my dividend income that has allowed me to continue to add to positions, even when I am unable to contribute new funds.

Looking forward to 2023, I want to continue to follow my Scorecard process, collect dividends, and contribute as I can to continue to grow these two portfolios.

As always, would love to see your thoughts, comments and questions below!
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I'm about to comment, and it may be outside your framework, so feel free to ignore it.

You've done exceptionally well to not be down as much as the market, so ten points from me on that aspect. So, you're putting into practice an effective way to help limit the downside.

Would you consider adding stocks with a bit more growth tilt so that when we do come out the other side, you're maximising much more to the upside?

Not sure if I've articulated my point precisely. Let me know if it makes sense.
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Chips made in the USA: Why I buy $TXN over $INTC
$ASML estimates that technological sovereignty will drive chip manufacturers away from Taiwan. Many think $INTC will be the big beneficiary, but I much prefer $TXN to benefit from this trend. Check out my new @seekingalpha article here

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Todor Kostov's avatar
$6.9m follower assets
UiPath $PATH - Industry Analyst Recognition
UiPath $PATH reported their Q3 2023 numbers on Thursday this week. Their ARR grew 36% year-over-year reaching $1.110 billion. One slide which stood out from their Quarterly presentation is their significant leadership in Group Robotic Process Automation (RPA) and Low-Code Development Platforms.

Source: UiPath Q3 2023 Presentation
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Brett Schafer's avatar
$27m follower assets
Mercado Libre Insane TPV Growth
Since 2017, $MELI has compounded it total payment volume at 55% annually and recently passed $100 billion in TTM volume

What would stop the momentum of this train?
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Yonathan Daniel's avatar
$110.6m follower assets
1 of 2
Time to start buying European Banks
Very interesting— as rates continue to go up more banks become more profitable. And European banks specifically because they were disincentivized to lend even more than American banks. But with interest rates rising they will be much quicker to lend, benefiting their earnings. Nice thesis.
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Brett Schafer's avatar
$27m follower assets
Power Hour: Why Isn't SBF in Jail?
Today we released our weekly power hour discussion on Chit Chat Money where we discuss a variety of investing/finance topics for an hour. Here are some things we hit on this week:

  • Why isn't SBF in Jail?
  • The state of the cloud market in 2022
  • Housing's lagging impact on inflation
    • more

Listen wherever you get your podcasts:

Todor Kostov's avatar
$6.9m follower assets
📊Big movers of the week📊
Netflix $NFLX: 12.73%
Meta $META: 10.72%
Las Vegas Sands $LVS: 7.42%
Estee Lauder $EL: 7.07%
Tesla $TSLA: 6.44%

PayPal $PYPL: -1.75%
Valero Energy $VLO: -2.08%
Baxter $BAX: -4.6%
Costco Wholesale $COST: -5.1%

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Samuel Meciar's avatar
$37.2m follower assets
$SHOP $190,4B worth of goods sold through businesses running on Shopify platform, just in the past year. The odds are you're ordering from shops running on Shopify without even realizing it.

Despite that, there's still doubters of Shopify's ability to execute.

Let that sink in!
The European energy crisis is boosting adoption for alternative appliances
Washing machines and drying machines, whether made by $WHR $GE LG, or any other manufacturer, are energy intensive. Sure, the energy consumption on the newer models is much less compared to the older models, but they still consume tons of energy.

Soaring electricity costs are encouraging Europeans to buy electric drying racks. At first glance, I never heard of an electric drying rack. As I did research on how they work and the benefits of using them, I was amazed to hear that (source):

  • they dry clothes 62% faster than drying machines
  • they're great for drying specialty and delicate clothes
  • no lint
  • uses 24X less power than your average dryer

According to a review by BusinessInsider, the electric drying rack is saving them a small fortune on their energy bill.

Outside of drying clothes, they're buying other energy-efficient appliances for the kitchen like air fryers (which can replace your oven, in most but not all cases), pressure cookers (which are also seen to replace ovens), and possibly the Tupperware MicroPro Grill (this innovation allows people to grill food in a microwave, which can greatly help Europeans save on energy while cooking them delicious food, which is probably why Tupperware insiders keep buying the stock).

And there's Greece, who's providing subsidies to people to switch out their old fridges and HVAC machines for newer ones. And there are concerns over how grocery stores can preserve food during the energy crisis.

There are concerns that as people switch out their gas-powered appliances for those that use electricity and use energy-efficient electrical appliances simultaneously, the power grid in various European nations will struggle to provide power throughout the winter. With little to no sun, the many solar farms that European nations built since the war began won't be producing energy. The wind farms will meet some of the energy demand, as long as the wind keeps blowing. Utility companies will be using the fuel from the storage facilities and will try to be conservative about the usage of that gas so that they can make it last through the entire winter. Gas imports will be difficult as the rest of the world endures an energy crisis.

Overall, the energy crisis has pushed people to adopt other innovations that can reduce their reliance on ovens, drying machines, and other appliances. Many of these innovations that I've mentioned are things people buy to help them adapt to living in a small apartment where there's no washer/dryer and because of this energy crisis, people that live in more spacious residences are buying those innovations. And if there are no innovations to replace certain appliances, then people adopt habits that reduce their energy usage.

This crisis is inspiring entrepreneurs to create innovations that can help us become less reliant on our big, energy-hungry appliances. VCs are probably working to find those startups that are making those disruptive "alternative appliances' because those startups are probably thriving while the rest of the world endures an economic slowdown and will maybe enter a recession.

The energy crisis of the 1970s inspired Americans to adopt and build energy-efficient cars. The energy crisis of today is inspiring Europeans to adopt energy-efficient appliances.
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