Equity Portfolio Breakdown
% Value: Value as % of my portfolio
% Cost: Cost as a % of my total cost invested into equities
This table simply visualises the divergence between my investment thesis and the current market expectations of the company. No hard rule on % cost allocation for stocks yet, nor a threshold where I will trim them.
Equity Portfolio Performance
Historical Portfolio Returns (top); Cumulative Portfolio Returns (bottom) - Since new brokerage.
Monthly Portfolio Returns
CAGR Performance
Note: CAGR for my portfolio is calculated as:
(market value of portfolio including cash / total cost) - 1
The CAGR returns are compared in the above table instead.
Crypto Portfolio Performance
* Charts start from end of November 2020 when I started recording my crypto portfolio. Summarizing:
Lifetime performance since Nov 2020: 16.4x my cost
Lifetime result:
- Achieved 2.81x of BTC performance (16.4/5.30)
- Achieved 0.97x of ETH performance (16.4/16.9)
Thank you Solan (again)
Net worth growth
If there’s only one metric that you can apply to your financial life, I believe that would be net worth. If you’re investing, perhaps under 5% of your gross income for investments, it’s a little hard (compounding considered) to eventually make a dent in your net worth.
To read this chart:
I’ve received ~23.4x my Jul 2019 net worth, in terms of income / bonus.
I’ve made my money work, and my net worth now is ~37x my Jul 2019 net worth.
I’ve accumulated savings of 7.94x my Jul 2019 net worth.
Red line is an extreme example; Anywhere between grey and red is acceptable, since you’re supposed to compound your savings, and not your income (i.e. you don’t spend anything). Onwards and upwards!
Overall Portfolio Commentary
As the year draws to a close, I’m proud to say that I’m quite satisfied with the performance of my portfolio in equities (outperformed all indices, even ARKK), commodities (Uranium ETF or URA, which outperformed SPY), and Crypto (which outperformed both BTC / ETH and all else).
I don’t really have major regrets on my portfolio movements, but given that things are just getting warmed up, now is not the time for complacency. There is a non-zero chance that I may make considerable amounts of money (but not enough to be life-changing), and I hope to seize the opportunity in both legacy and crypto markets.
For a start, my view of the market is quite straightforward. Markets are all expecting Fed to maintain their rates or cut (i.e. dovish stance), which is a great thing for market prices all around. Money has always been on the sidelines, and I believe they’re just waiting for the right moment to deploy.
In terms of my equity exposure, as you’ll see below, I closed my URA 0.00%↑ trade for a 30% gain since 2021 (good enough for me), and I’ve actually deployed the capital to equities, which I think will catch a bid when Fed loosens its monetary policy, and going into 2025. I have no doubt that this time next year, prices will be much higher than they are now, and I don’t really want to be caught off guard.
If equity markets are going to have a semblance of performance like 2020 and 2021, you best believe that the crypto markets will blow your mind. My high conviction bet is on Solana, and at ~$86, which is only 30%+ of prior all time high of $200s. Imagine the salt / seethe once this coin breaks out of all time high, and what happens to the ecosystem coins then (i.e. dogs).
Realistically speaking, it is the blockchain with one of the highest throughput / usage / dev community / user base, and it does all of that with next to $0 fees. Not sure if retail will enjoy paying $50 for just one transaction on Vitalik chain (ETH). I am pretty damn confident that Solana will climb back to all time highs, and have opened quite a few leveraged position to fully capitalise on this.
I think a lot of people look at crypto and call it a scam. But why would Blackrock apply for a Bitcoin ETF then? The term, I believe, is over-generalised to describe coins / tokens that you’ve invested in, but had lost money. Always try and form your own opinions on this, and don’t listen too much to anyone, even me.
You can view crypto as a scam, but that shouldn’t stop you from making money.
My last point is that there is no reason to park your cash in high interest rates accounts, if the rates are likely to decrease going forward (see the 10-year treasury yield). Markets are already moving ahead of this, and stock prices have already appreciated a fair bit, as a result.
Do with this information what you will.
If you’ve already allocated, then its time to sit on your hands for a bit :)
Equities Portfolio Commentary
Since my foray into the investing world in May 2020, I’ve invested in quite a number of stocks, only a handful of which I’ve held until now. As I mature in my investment thinking (thanks, Phillip Fischer), I realised that the secret to success is not to own many stocks, but to have high conviction in as select few.
Frequent readers of my article would know that my ranking for stocks (in order) are: Tesla, cybersecurity, SaaS, discretionary, ecommerce. It’s indeed a shame that I’ve sold Nvidia a little too early, but it is what it is.
Going into 2024, as I’ve said above, it is best to prepare and position for the upcoming market, what with the defeat of inflation, and the potential rate cuts.
Let’s review the companies in my portfolio holdings, and why I think they’ll outperform the indices for the next year (and beyond):
Tesla
Undisputed leader in global EV sales. Losing market share in China of course, to NIO and BYD, but overall in good position to mass-make EVs (New Tesla Model 2 (?) and Cybertruck are bull catalysts) and sell them for a proposed CAGR of ~20% to 50% every year. My current thesis does not include any revenue from its other products (which are non-mainstream / not material yet), such as Optimus (humanoid robot), Full Self driving (FSD), RoboTaxi, and perhaps the commercialization of DoJo (their supercomputer).
It has a decent runway towards being a Toyota / Honda of EVs, and share price has much to appreciate from here, if that happens.
Crowdstrike / Datadog / Snowflake
These 3 are grouped together because they are companies providing services that are desperately demanded / needed by customers. In other words, best-in-class.
Crowdstrike operates in the Cybersecurity realm, and industry vendors (e.g. Forrester, IDC) see it as best of breed. Their win rates are also impressive (against legacy such as TrendMicro, Microsoft, as well as next-gen competitors such as SentinelOne), as is their customer module adoption rates. They have a very generous margin profile, and most recently saw 0% in GAAP Operating Margins, and 30% in FCF margins.
Datadog operates in the observability spectrum, allowing customers with a single pane of glass with which to view anything and everything. Recently they had made ventures into cybersecurity (as did Crowdstrike, into observability), which saw them also becoming the consolidating vendor of choice (since they offer a wide range of services). Similar to Crowdstrike, Datadog’s margin profile continues to impress, which is really hard to justify not owning.
Snowflake is a company offering multi-cloud storage / compute / data capabilities and services. As cloud neutrality becomes a thing of necessity (i.e. companies want to have multiple fallback options), companies that deal as the middleman (thus could be disintermediated in the future) stand to earn that phat share of cloud profits. Snowflake is one of them, and it is becoming one of the most popular platforms to dump / analyse your (big) data, anywhere and everywhere (across all geographies).
Cloudflare
Cloudflare is akin to a 4th Cloud player, with much more data centers which traditionally operate to serve content (i.e. Content Distribution Network, or CDN). Because they’re so near to actual consumers, they are a perfect platform for consumer apps that require local, high-speed connectivity or throughput.
Given their presence in most countries around the globe, and with such a vast network which is often referred to as the ‘backbone’ of the internet, they are the ideal platform of choice for:
Security products, such as having a secure channel to connect to your company’s private network.
Geofencing data, with EU increasingly concerned about where data is stored.
Programmatic Edge Networks (I’ll leave you to research about this, if you want)
AI inference at the Edge - inference need not be done at centers of hyperscalers (i.e. AWS), which carry much higher fees, but can be done locally at the very same servers that operate as a CDN.
Essentially, they have the potential to serve as the backbone of the internet / data / AI, delivering such value-added services locally in ways that hyperscalers cannot.
Roku
Roku hopes to be the platform of choice when the whole world switches to streaming platforms. Its platform contains thousands of channels, including e.g. Netflix, HBO Plus, Disney+, as well as live TV in local areas (e.g. in your own town). It also has its own content channel (The Roku Channel), which is AVOD (i.e. watch ads to watch the channel for free) which gets around the same market share in viewing hours as Paramount.
In the latest quarter, users of the Roku Platform watched 26.7 billion hours. That’s ~3+ hours per living person, which is astounding in itself, when you consider that there are only 75.8 million active accounts (i.e. Households). Given the amount of eyes on this platform, my investment thesis is based on the advertisements that will be placed through Roku (than anywhere else), which of course is the high-margin business that offsets its unit sales.
Together with the mega-trend that everybody will shift to stream (I already have), it’s a good company to own and invest in.
Sea Limited
Last but not least, Mr Forrest Li and his team of Garena, Shopee, and SeaMoney are most affected by macroeconomic environments, which has likely seen the worst of it (I think). Consumers would naturally stop spending more money, if they felt like a recession was coming (which may put them out of their jobs). This is also tied to interest rates, since if interest rates are high, people are less likely to invest / buy stuff when they can save that money for a higher interest rates.
My investment thesis is dependent on Shopee, SeaMoney becoming the biggest players in their respective industries (eCommerce, Fintech). Shopee is the market leader for Asia, while SeaMoney is a budding fintech service provider in certain Asian countries. For Sea Limited to be a great investment, more people need to buy more things from Shopee, and pay with ShopeePay (i.e. SeaMoney).
Conclusion
This practice serves as a useful reflection of what I like about my companies going forward. I remain hopeful that prices for these companies will be higher this time next year, given Fed’s dovish pivot on Mid-Dec.
Bull markets are upon us; Time to start investing money into the markets again.
DCA Strategies
Tiger Trade (Closed)
It’s been a roller coaster ride (literally) for my exposure to Uranium. While I’m confident that the energy-packed commodity will continue to do well, I do think my conviction for other assets (stocks) have grown to a point where it’s literal opportunity cost, if I don’t plow more money in those assets.
I am quite confident we’re pass the halfway mark of higher, for longer. What has remained elevated for so long (inflation) has come down (& faster than people expect), and what has stayed high for so long (interest rates) would need to come down, if governments worldwide want to avoid a recession (which is the worse of the 2 evils).
Nothing wrong with the commodity, but going forward, future returns for assets I want to own should be much higher than $URA (which isn’t even a pure play on the commodity). It’s been a good 31% gain since then, and I’m happy to have beaten SP500.
Endowus
Bitcoin Mining
Crypto Portfolio Commentary
Solana
I do apologise in advance for the noise I’ll be making in my articles for the first half of 2024. I am quite confident that crypto will do well, given its beta over traditional markets, when Fed eventually admits that it has kept rates far too high for far too long. Furthermore, the markets don’t act on current news, but are always looking ahead (~6 months later). Thus, positioning of your portfolio becomes super important, because by the time you wait for Fed to actually cut rates (which is a safe bet for sure), prices would have changed based on sentiment, and the gains will be moderated.
Anyway, in a scenario where Bitcoin breaches 6-figures (not as stupid as it sounds, I can assure you that), I can guarantee you that retail will be flocking into this space looking for the next shiniest object to buy and own. What do you think they will look for? Hint: It’s not the chain where you pay ~$20 to $100 for every transaction.
Very looking forward to what 2024 will bring, and I think if you’re already thinking about crypto exposure, why not diversify some BTC/ETH into the Solano for some leveraged upside?
Of course, for people who think that crypto is a scam, it’s hard to convince them otherwise. But my thesis (beyond betting on the performant blockchain) is essentially betting on market inefficiencies / reflexivity and the ebbs and flows of ‘smart money’:
The higher the price of the coin, the more people want to buy it (i.e. shiny coin)
Markets are looking optimistic, based on inflation data (subsiding), and credit situation (improving). If all goes well, markets should float higher, where Fed will do all it can to avoid the US economy going into recession.
Access to crypto would be further democratised with the approval of the Bitcoin ETF, which validates BTC as a ‘regulated’ investment vehicle. Note that the application has a higher probability than a few years ago, since it’s an application submitted by big institutions a la Blackrock.
Traders / capital are always looking to chase after beta. Thus, once the BTC ETF trade runs out, they would look for the next big opportunity, and ‘smart’ money will again flow into the altcoin sector, where the ‘prettiest’ coins are continuously getting picked and priced higher than before.
If you don’t understand a word I said, that’s OK.
Just remember to always have some crypto. Please.
The picture below shows how ridiculous the up-pricing of tokens can be. I received an airdrop of ~10k JTO tokens, due to my activities in using the protocol on Solana. The first day it was tradeable, it was valued at $2.5 USD.
It’s really hard for me to explain what I’m doing here, but (absolutely not investment advice) if you’re looking for someone to guide / talk about Solana in general, look no further than this account. Of course, you can’t copy your way to financial freedom, but you need to understand the current hype narratives (which are dog coins, and airdropped tokens), and be able to take advantage of them.
I have done so (with some luck, of course) with $BONK, which I had bought at an adjusted price of $0.0000038. It was nearly a 10x, at $0.000028, but at the time of writing (21 Dec) it is now in the ~20 range.
It does pay to be a little ‘fanatic’ about wanting to understand more about hype and memes, which is purely what’s driving this doggo coin.
Without my consistent attention on the Solana ecosystem, I would never have noticed the dog coin / mispricing of SOL, and would never have took the initiative to diversify away from BTC/ETH to focus my allocation on SOL primarily. This strategy is showing early signs of success, and I hope it’ll continue to do so going forward.
My advice to my readers is to be open to 2 things at once: Believing that crypto is a scam, and believing that you can make serious money out of it. You just need to put in the due diligence, something that very few people do.
Let’s revisit this 12 months later - hopefully I’d have kept most of my gains.
As if Fed cutting isn’t enough, Central Banks, from 1 Jan 2025, can hold up to 2% of their reserves in crypto
Bank of International Settlements BIS says: The standard will permit 2% crypto reserve exposure among banks. BIS says the global banking system's direct exposure to crypto "remains relatively low."
Not sure how much more bullish I can be here.
Conclusion
Thank you once again for reading thus far. The road before (i.e. 2022, 2023) hasn’t always been easy, but it’s time to reap the fruits of my labor (both metaphorically in markets, and in actual work) in 2024.
Let’s hope the markets don’t let us down, and we move onwards and upwards.
Cheers,
Joey