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Multibagger ROTH IRAs?
I was originally never planning to start a ROTH IRA as I was focusing on cash flow and wanted not to be charged when I withdrew money from the account. I have always liked 401k and ROTH IRA - I still have my 401k from the previous company I worked on. So what changed? Why did I start ROTH IRA - not focusing on cash flow but rather with growth stocks.
  1. I have my cash flow requirements fulfilled. I needed around $800 per month for me to survive in Nepal, I now get around $1,170 on average on dividends.
  2. I have always been a fan of growth stocks. As seen from my dividend portfolio - I have always had a liking for companies with great growth potential. I added companies like $U, $SQ, $DIS, $JPM which gave no dividends, and companies like $AAPL, $COST, $MSFT which gave very low dividend yeild. It's apparent from my fund called story fund where I selected 10 companies and invested for 10 years: https://share.commonstock.com/59ul8qNRyjb I haven't looked at that portfolio's return yet.
  3. Peter Thiel. The biggest pushing factor for me to open a ROTH IRA and put growth stocks in it was Peter Thiel and an article by Market Watch on how he turned $2,000 into $5B and not get taxed. It was like wow that's what common sense looks like. I was not smart enough to get it on my own but hey what if I can replicate it to 10%? I can have a decent amount of money when I am old.
So, on September 8th (which happens to be the day I left Nepal for the first time 6 years ago) I started my ROTH IRA acc on my M1 Finance account. As I was using Peter Thiel's strategy - I wanted to invest in companies I understood the most. Unlike Peter Thiel - I didn't have a publicly-traded company so I decided to go with $U, $IS, and $APP for the following reasons:
  • I understand the game industry. I have been in the game industry and know the unique position these three companies are in to be successful companies. I value $U higher than $IS and $APP as it is a platform company and the latter being a service company.
  • I have worked with all of them. In my around a decade of game industry experience - both on the development and publishing side - I have seen them grow and know what is their limiting factor.
  • I understand the niches they operate on. On overview, $IS and $APP looks like a competitor in every aspect. However, $IS and $APP are the only competitors in performance marketing and are playing different games in publishing with one shifting its focus on hypercasual and the other on casual-ish games.
  • I ain't Peter Thiel, I want diversification. I understand $U, $IS and $APP isn't as diversified as they come from the same sector. But, I don't quite know which company will be the leader. I have higher confidence in $U. So, in a way $IS and $APP is a hedge against $U.
What are my plans with this ROTH IRA portfolio?
  1. Leave it as it is. A Fidelity research from 2003-2013 showed best returns were gained by dead investors. So, I will act as if I am dead in terms of selling. Best Investors are Dead: One Simple Strategy To Up Your Investing Game (wealthydiligence.com)
  2. Add at least $1,000 per year. After the first year - I will add at least $1,000 per year and if I have extra cash I will add more to it.
  3. Multi bagger it baby 💎. As the great investor Peter Lynch told you don't need 10 multi-baggers in life to get wealthy - you just need 2 or 3. All of these 3 companies have a chance to be multi-baggers in their own right. $IS needs push of institutional investors. Right now I hold more $IS on total than some of the institutional investors.
So far, I have gained 6.87%, with ups and downs. Swings of +-4% are very common in this portfolio. I will post my analysis on $IS and $APP soon.
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