Commentary
For the Year ended 31 December 2021 the portfolio returned +45.7%
Embracing Inactivity
In 2021, I made a single purchase trade and no sales. I also cut back my research activity significantly, having only done 6 write-ups during this time frame, as opposed to the 19 I did in 2020 and the 23 I did in 2019. I do think I need to have some level of consistency in this area so perhaps incorporating a goal on this front would make sense to ensure I’m actively turning over the rocks I see instead of letting them float by.
There is no doubt this lack of writing assisted in my lack of activity, although I would default to the thinking that inactivity is not a good thing if you aren’t feeding potential ideas through your filters at the same time. This frame of mind is a drastic change in comparison to the Coffee-can Investing style I documented on last year. This is because I have come to realise that these positions are without a doubt ideal to have, not every business can be considered as suitable from day 1, only after decades of suitable compounding can i confidently say that each position is indeed worthy to be classified as such. Therein it’s crucial that the thesis checks out on a regular basis along the way.
As mentioned, you’ll notice significantly less volume of content written up this year. My obsession with investing is still there however, it is more controlled now that I have curtailed my exposure to investment content. Beforehand I was part of several social groups including Facebook, Discord and Twitter where I found myself spending a LOT of time on commentary about investing, much of which was not actionable to me in the slightest. This also included an unhealthy obsession with watchlist monitoring & revisiting positions on slight changes in valuation. In February-March of 2021, I realised this and began taking steps to reallocate my priorities. This materialised in deleting all social media besides Twitter and reducing my following list on Twitter to those that ONLY share actionable insights to me (ideas mainly).
This further snowball in inactivity should assist in the asymmetric nature of long term compounding in a ratio of effort per dollar gained. It is much closer to being a passive investor than a full-time active investor, just that I have replaced index funds with being a ‘Silent Partner’ of a business long term.
“On the one hand, the position is analogous to that of a minority shareholder or silent partner in a private business. Here the results are entirely dependent on the profits of the enterprise or a change in the underlying value of its assets.”
~Benjamin Graham, Ch 8 Intelligent Investor
With this free time, I have begun to read books more often, starting a Goodreads account with the intent to update my Bookshelf (want to read) with books I own and mark them as read as I finish them.
More recently it has become apparent to me that I have begun to reverse some of the improvements I have made, so I will need to think about a more sustainable approach to the reduction in time lockup associated with investing, nonetheless some of the improvements have persisted so It has not been without fruit.
Regarding the investments I have made, you can refer to the initial write ups I did at the time below:
That is all for 2021. Thank you for reading.