My Portfolio Performance, Positioning and The Trades I Have Made
From our last update, it's very different this time
The number one goal at BluSuit, is to obviously help everyone make money, but more importantly, be transparent into everything I do. This earnings season was very difficult for many investors as stocks unexplainably sold off 20%+ for their business results. Obviously there are always speculations as to why someone could have sold the stock but more often than not, it’s relatively simple. Sometimes expectations just simply exceed the fundamentals of the business and it becomes unrealistic. In the long run, valuations do matter.
Before I share the results today, I’d like to share first my longer term strategy and thought process. Over the past few years, we have been blessed with a pretty aggressive market rally. I believe this has a few major trends contributing to this:
Fed monetary policy has been dovish
Corporate earnings grew substantially
Inflation was 6% YoY, benefitting stocks
Broader participation of the retail investing community
Economic growth has accelerated since the bottom of the pandemic (mostly driven by government stimulus)
The problem is that looking forward, many of these factors are destined to change especially economic growth, corporate earnings growth and dovish monetary policy. We are going to inevitably see a different market climate.
This becomes a bigger issue when you look at stock valuations and S&P 500 projections. In the image above, you can take one things away; the best case scenario for stocks (the S&P 500) next year is 8%. Obviously projections should be taken with a grain of salt, but they provide a benchmark and framework for decision making. The projections are also assuming that the market maintains historically elevated forward P/E ratios. The likelihood that the elevated forward P/E ratios stay the same are not favorable especially if interest rates rise.
So, how does this impact my decision making and portfolio strategy?
Truth is, it doesn’t. I am still certain that the key to market beating returns are to buy and hold great companies with growing earnings, growing revenue and a competitively differentiated business model. However, what this data does do is temper my expectations on what I would assume my future returns to be. My focus and strategy for 2022 will be asset accumulation on the inevitable dips/market corrections and leverage valuations to buy great stocks at good prices. Funneling cash into my portfolio is priority for me next year.
It’s important to say that for a few years I have outperformed the market by a wide margin but I am not sure if I will outperform the market next year. I expect it to be turbulent. However, I will work within a historically proven framework and share my journey, even losses, every step of the way.
My Portfolio Performance YTD and The Trades I Have Made
I will break this section up into 2 parts, complimentary and member only. I will make my portfolio performance and positions complimentary but the trades I have made and why for members.
Currently, I calculate my YTD returns by:
(Ending balance - Jan. 1st starting balance - money contributed to portfolio) / Jan. 1st starting balance = % increase
This means I am calculating the total returns my portfolio has increased organically. In this particular instance, I have realized 65% YTD returns. My YoY returns are 90%. My positions and portfolio weighting per position are found below:
From the last time I shared my portfolio, there are significant changes in position sizing and the positions I hold. You can find my last publication here:
D-Local is currently my biggest loser but I have little worry as they are one of my highest conviction stocks. My only regret is that I bought the stock too high and too soon. Long term, I do not for-see this being a loser and would like to add to it more. My biggest winner used to be Upstart but sold off after earnings. I have little worry about the recent price action and have mostly dismissed it and took a long term approach. The business is stronger than ever.
Palantir has proven to be my most frustrating stock, which I am sure it has been for many, due to it not moving at all except from $22 - $26. This has a lot to do with share holder dilution but one day, this company could be very, very, very big. It will always have a place in my portfolio.
Portfolio Trades and Strategic Rationale
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