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Month: January 2023

My All Time Investment Performance January 2023

My All Time Investment Performance January 2023

As I mentioned in last years review, I really came to realize that all-time investment performance is heavily dictated by the most recent years performance. It’s just the nature of compounding. A really good or really bad year now will greatly influence my all-time performance, just because I am now dealing with much larger numbers. A 50% swing one way or another when your portfolio is worth $1M vs $10,000 moves the needle a ton and dwarfs all of the moves that were made in all of the years leading up to it. So bottom line one shouldn’t get too confidence or discouraged looking at long term annualized result as its greatly influenced by recent returns, which is kind of goofy.

So in that vein my all-time annualized stock return fell from 22.65% to 15.33% – which honestly is still quite spectacular and honestly higher than I had expected. The calculated risks that I talked about last year have at least in this short period of time looked like dumb decisions – keeping nearly half of my nestegg in a stock that is down 69% in the last year. Trust me I would love to have the few extra million that I had on paper last year, but this is a marathon and not a sprint and I still feel like long term I will outperform the market with these calculated risks.

I do however and have always acknowledged that I think I am probably more lucky than skilled and going through another one of these downturns will probably make me re-evaluate my investment allocations going forward. Not so much because I think that the approach is wrong from a profit maximizing standpoint, but from a risk/reward standpoint taking added risks and them paying off does not meaningfully affect my life where as if it turns out I am indeed just a lucky moron and I am completely wrong on most things going forward it can affect my life.

MFJ Returns By Year

YearSP500MFJ NesteggMFJ StocksMFJ Investment GainsBeat SP500

MFJ Cumulative Returns By Year

YearSP500MFJ NesteggMFJ Stocks

Annualized Returns since 2006

SP500 +7.89%
MFJ Nestegg +10.52%
MFJ Stocks +15.33%

My Best and Worst Stocks in 2022

My Best and Worst Stocks in 2022

In annual tradition I will list my best and worst individual stock performers for 2022.

My best performers
Starbucks -14.98%
Chipotle -17.93%
Vanguard Institutional Index Fund -21.25%
Vanguard PrimeCap Fund -23.59%
Brookfield Infrastructure Partners -23.91%

Well obviously it was a rough year if I have to celebrate the investment holdings that didn’t lose more than a quarter of their value in the year. I really only had 3 investments hold up better than the market and overall it was a brutal year, but not to be unexpected

My worst performers
Upstart -90.86%
Fubo -89.26%
Shopify -74.54%
Tesla -69.20%

Now this list is equally brutal and to make matters worse Shopify and Tesla are on the list and going into this year just those two stocks accounted for 47% of my nestegg. Definitely hurts, but it is the price of admission. Also while it makes sense for me to do this in annual tradition, I do not buy investments with a holding period of 12 months. So while it might be terrifying to some to see ever investment you own lose money and your largest investment drop by 69%, I tend to take a longer term view and am not changing anything because of this 12 month period the results were horrible. I held Tesla through many down years and again if we take a step back and zoom out just a tad bit things look pretty darn good.

Even if I only zoom out to 3 years Tesla has returned 329.50% during that time and if we go back 10 years we are looking at 5209.48%. Despite everything you see in the news and from the financial media, investing is a marathon and not a sprint and the ability to ignore the noise is what separates people who make money and who don’t. I look like the worst investor in the world if you only look at 2022, but I think if you come back and see how I’m doing in 2032, 2022 won’t even be a blip on the radar.

Investment Holdings January 2023

Investment Holdings January 2023

In annual tradition I list all of my investment holdings. I do not do much buying or selling, but the percentages have changed quite a bit in the last year due to market fluctuations. Last year TSLA accounted for almost 40% of my nestegg and now it only accounts for 24% and earlier this year it was over 50%!! As a result I have become much more diversified and well poorer 🙂

The other big change I would say in the last year is the amount of cash I have on hand. Now this is not primarily cash from selling – though I did take advantage of some tax loss harvesting at the end of the year, the vast majority of this money is money from a side business I started, some inheritance, and some crypto cash that I have as a start to my cash cushion. It’s very hard not to invest it given that many of my stocks are down 70%, but it is money that can be used for short term security or other short term needs. Historically this is money I would have never counted in my nestegg, but I think at this point in my life is something that I should track as it is something I would potentially leverage should I decide to stop working.

The other item I have not included in this list is in the last year I did invest $90,000 into a commercial real estate purchase with some other investors purely with the intention to learn. Now I hope I make money on the deal, but real estate is so hard to value that I will consider this money a 100% loss until some day when it sells. With leverage I personally view RE as a huge liability as if shit hits the fan you can lose like 5x your original investment where as the worst stock can only lose you 100%, but again I know there are tons of tax advantages and other benefits to real estate and while I’ve flirted it with it my entire career, I’ve always shied away because of the effort involved and the difficulty accessing the equity. I am not sure if this investment is going to change those opinions, but I was in a position in my life where I decided to give it a try.