In part 1 I looked back on my general thoughts. In part 2 I want to share some thoughts on more specific mistakes, learnings and plans for 2023.

I didn't think about position sizing that much in the past and I felt that with -16,5% performance in January this year. Beside some basic large caps which made up about 1/4 of my portfolio another 1/4 was filled with $SE $ETSY $NFLX and Bico Group (unprofitable swedish MedTech). As I bought $APPS in January it instantly made up 8% in a portfolio of 17 stocks.

Sure, afterwards it's easy to say I should have made things different, but if I look at these companies they provided some risks like high valuation ($SE & $APPS), easing covid tailwinds (basically all of them), heavy M&A (Bico & $APPS), unprofitability (Bico & $SE), weak moat ($NFLX), unexperienced management team (Bico), ... which I didn't pay that much attention.

So I believe here was my main mistake in 2022: Didn't acknowledge risk by position sizing while allocating for an (naive?) upside without considering downside. I don't want to set strict rules for that in 2023 but I will play around with position sizing in 2023 e.g. decreasing exposure to a riskier stock if it makes up XX% of my portfolio. Call it risk management. I have to find out what works for me so it probably won't work out as I want, we will see.

As I'm down -40% for the year I have to comment on the stocks I picked. Did I pick the 'right' ones at an unattractive valuation or did I pick the 'wrong' ones beside their valuation anyways? Hard to say what's right or wrong respectively easy to say in hindsight and one year isn't the right timeframe to answer that anyways but I believe I did some basic mistakes:

those are simpliefied. It wasn't that bad. I knew a company won't grow with 30% p.a. for 20 years, knew that high valuations shrink future returns and that analysts can and will be wrong but I guess I didn't take this 'knowledge' serious enough and was likely to ignore it more or less when valuing a company.

2022 was noisy. Everyone had opinions on everything. Wherever you looked someone knew what you have to change in your portfolio, which stock you need to sell because they will go bankrupt and which macro trade will outperform everything. At the start of '22 I saw myself wasting so much time on senseless predictions and discussions totally distracting me. Luckily I was able to get rid of the noise throughout the year by cleaning up my Twitter feed, avoiding market news and daily performance checks and focusing on impactful discussions and content out there. I'm confident to continue that in 2023.

Spend twice as much time knowing what you own versus new ideas. What you don’t own can’t hurt you. - Ian Cassel. In the past year I definitely spent more time looking for new ideas than keeping myself up to date and diving deeper into the companies I already own. As my portfolio is more concentrated now I want and need to change that. Hard to say but maybe I could have avoided some losses if I would have been more focused, who knows.

At least something went great in 2022: I didn't overestimate my risk tolerance. I'm totally fine with that volatility, I'm fine with being red, I'm not in a bad mood, ...

I definitely want to read more investing related books. What means more? Four Books are the goal, one every quarter. Sounds easy for many but I never had a reading habit so I need to start somewhere. I want to start with rereading 100 Baggers by Chris Mayer as I didn't take any notes as I read it last year followed up by:

so nothing too special, just some 'basic' stuff.

By reading more, combined with my experience so far and dozens of other sources like Fintwit, Commonstock, YT, ... I would like to define a more detailed framework on top of my basic idea. But that's something for the 2nd half of '23.

In the first half I definitely plan to spend some time with Excel. Create one big spreadsheet were I can find all the data of my stocks to really track the fundamental development and to compare them. It's not that difficult but will take some time to organize the data.

That said I hope everyone who celebrates had a great christmas time and I wish you all the best for the upcoming year.

Stay humble, avoid overconfidence.

Cheers.