Eric Messenger

I posted stories about Coinbase a couple times recently, it’s the largest position in my portfolio. I literally just posted something 20 minutes ago that I’ve been working on this morning about some legitimate crypto projects to invest in. And mentioned several times how much more I trust Coinbase than other exchanges.

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They jumped 20% yesterday so that had a significant impact on my portfolio. But I headed over to SeekingAlpha to see what was up this morning after I posted the CommonStock and saw that it’s up 30% already today. This is obviously some runaway algorithmic trading foolishness. But it had a Hella impact on my portfolio and it’s really tempting me to sell this position because I know it’s going to drop significantly over the next couple days and I can buy back in at $70 or lower. My problem is I don’t know jack shit about technical analysis, I just see the price bouncing all over the place and the more it happens within a relatively easy to scalp 10%-20% gains, the more reliable I tend to believe it is. As a long-term fundamental value investor, I don’t do a lot of swing trading. I do buy really undervalued stocks and sell them when they return to FairValue. Sometimes it takes a week, sometimes it takes three months; so I definitely feel like a traitor sometimes. But with Coinbase I think I have more long-term faith than just selling it at $106. So I think my prior two articles have convinced me to just hold onto my position, and continue adding when it sees more significant dips of >10% like I have done all year.

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Just sharing real time thoughts of an amateur portfolio manager😉

I actually sold my Daqo position for >80% gain, holding approx. April-July, maybe they just track current holding that is best trade.

Short term results are luck, can’t wait to see these long term results 12-18 years down the road, when I can start bragging🤣

When I initially got into crypto, everyone around me was in Shiba Inu & Dogecoin. After 15 minutes of due diligence, NOT including Musk & Cuban’s Twitter accounts, I knew those were not legitimate investments I was taught to make by the Buffet/Graham/Lynch style of analysis. I tried to utilize fundamental and qualitative analysis to the best of my ability in the crypto space. While tho gs have been turbulent, there are 10 or so projects I still feel comfortable accumulating and holding long-term. I always traded my crypto, not invested, so I’ve never been holding much for major crashes, have been extremely lucky to see some 20%-30% ROI months (not years), and avoiding the 3 catastrophic losses that have happened since I got involved.

Now that prices have crashed so low, to realistic levels, I feel confident buying for long-term positions. Buying Axie @ $185 early on was nuts, buying it for $15 today is also nuts, in reverse, as is usual behavior for investors. Too high, then too low. So I wanted to share a few clips of some of my favorite “real” projects to look at as legitimate investments (not theoretical, future problem solving projects; but real, revenue generating, active projects).

I’ve mentioned $CRO.X and $AXS.X , two of my favorite crypto investments and the only two I’ve added in the prior few months. Others I’ve started accumulating again at current prices are $AAVE.X , $MKR.X , $UNI.X , and $ETH.X 2.0 (1.0 been staked awaiting conversion). As Some of the crypto DeFi platforms failed, and filed bankruptcy, projects like Aave & Compound were paid before human creditors due to the execution of smart contracts; demonstrates the sustainability of the idea & use (if Ethereum BILLION # isn’t enough). Also have added two more speculative positions; $GALA.X a gaming ecosystem and $CHZ.X , a coin that represents voter/fan rights for sports organizations. Chilliz has already been working with European soccer organization‘s for a couple years and has deals signed and NFT collections created and sold with the NBA and the UFC. Very small market cap coin, still relatively unknown; fan is short for fanatic😉

Here’s a couple articles mentioning the revenue generated by some of the projects mentioned. I understand revenues in crypto space are not like revenues in the stock market. I have no claim to future earnings and cannot analyze these investments the same way. But if I am going to invest in crypto, I want to see real, tangible revenues and a management/developer team who meets their goals as laid out in the white paper and understands how to generate revenue with a Blockchain. I was sort of blown away that the simple lessons taught to me by Warren Buffett and Peter Lynch were so successful when analyzing & investing in crypto projects. The only thing is you really need to have confidence in your convictions. The crypto market is much more volatile and you really have to believe in what you’re investing in to be able to hold on for the ride. I am not a technology expert, so I cannot dive into some of these projects as they are still way too complicated. But ones I can see and use, that are growing and seeing adoption, I can feel much more confident in. Crypto is still less than 2% of my entire portfolio so it’s not like I’m taking any real risk here.

My analysis took me to these companies in the TTM, just wanted to find a couple articles with some numbers for you:

Here’s a link to entire Block.co article

Link to Motley Fool article

And links to the two speculative positions mentioned

Crazy to see China have more Fortune 500 companies than America.

Lots of volatility all over the markets. As many stocks as I have now that I’m publicly sharing a portfolio, I can’t catch the easy bounces I used to never miss. But here’s the best performers in each of our portfolio’s currently. All of these stocks were purchased in June or July 2022. Hard to hold onto easy gains that are lucky jumps (to someone who doesn’t time things) but I’m trying to be a patient long term holder. But what was successful early on was grabbing those quick 10%-30% bounces in 1-3 months. Doesn’t seem like much but if you compound 18% quarterly (random quarterly performance pulled from top ranks), it comes to almost 100% annually. If you compound 10% per month, it comes out around 300% annually. We’ll see which method works best; the easy swing trade/flips or the buy and hold, for me personally. This is why I have multiple accounts; several 401-k & IRA’s, so if I mess things up it’s not ruinous.

I had my kids start picking their own stocks to diversify our portfolios in their custodial accounts from my own. They picked $AAPL, $SBUX, $NFLX & $LULU. So the stocks they picked a couple weeks ago are smacking me around already. Should’ve let them pick all their own stocks all along.

What’s funny is that the stocks I chose in my portfolio are the biggest losers currently. The stocks my system picked are kickin’ ass. I wanted a mechanical system to remove my emotion. Seems to be doing well so far.

All purchases were made between June 3 & July 27. The two companies I blacked out, apam Research and Target, were bought in May.

First 3 picks are my portfolios top performers right now, bottom two picks are son & daughter’s portfolio.

Daughter chose Starbucks

Son chose Lululemon

For all the doom and gloom I hear about in the stock market today, these returns don’t look too bad; for positions less than 60 days old. Tempting g not to flip ‘em like I use to.

This podcast was just released today. Secrets to wealth are on the last 5 minutes 😉

“I believe most investors have their eyes on the wrong ball; one quarters, or one years performance, is meaningless at best and a harmful distraction at worst”

He also mentions adding to your positions that are underperforming, which is exactly what I do, and why I find it easier to invest during recessions than bull markets.

In case you aren’t familiar; somehow I had never heard of Howard Marks until about 3 months ago, even though I thought I’d studied most of the greats. His performance, for the last decade relative to all the others compared on this site (from Dalio & Greenblatt, to Yackrman & Gates) is insane. Here’s Marks’ performance against my mentor and some other famous/successful money managers.

Source: Stockcircle.com

When seeing Buffet’s track record beside market performance, I noticed what really put him ahead was avoiding catastrophic losses. Many years he beats the market, but the real outperformance comes from only losing 5% while the market loses 20%. Howard Marks touched on that in this memo and it’s gold.

“I like caution in my money managers. I believe, in many cases, the avoidance of losses and terrible years is more easily achieved than repeated greatness. And thus, risk control is more likely to create a solid foundation for a superior long-term. Investing scared, requiring good value and a substantial margin for error and being conscious of what you don’t know and can’t control are the hallmarks of the best investor’s I know”

It’s the reason for my individual success. I buy value stocks with a margin of safety. Avoiding massive losses keeps me from having to make up too much ground. Here’s a screenshot from TipRanks to demonstrate the idea:

4041 is the same portfolio I have linked here; you can see while the average TipRanks portfolio lost ~19% in April, I went sideways. Usually not a good thing, but I’ll take sideways over a 20 drawdown all day.

Avoiding losing makes winning so much easier. So overpriced growth stocks with lofty valuations and companies without earnings go straight to the “no thank you” pile.