Portfolio Update +165%. Please Don’t Make This Mistake
Today We’re Covering:
Portfolio Performance Update
Something really stupid you shouldn’t do
A lesson from Warren Buffett and David Gardner that will immediately make you a better investor
Full portfolio update with current position sizes
Portfolio Performance Update +165% since August 2022.
Our premium subscriber chat is really starting to get fun. We talk about our stocks, share new ideas, and it’s a quick way for me to share any trades or important news each day without blowing up your email inbox.
This has been an incredible market and a lot of people have made a lot of money. If you spend any time on X or any social media platform you’ll see people talking about just how easy it is to invest.
Buy a stock people are talking about, it goes up, sell it when the hype starts to die down, repeat. It’s EASY.
But actually. It’s not that easy.
Unfortunately, the truth is that a lot of people have actually lost a lot of money and maybe worse, have created habits that put them at risk of losing a lot more money in the future.
Like going all in on a single stock. I saw this tweet and it really bothered me. Actually the tweet itself didn’t bother me.
There are people every day giving horrible advice.
What bothered me were the responses to my tweet from other people echoing just how easy it is to go all in on a stock “when you’ve done the research”.
The truth is that even if you are the top expert in the world on an industry or company, it is still impossible to KNOW what the market is going to do.
There could be a geopolitical shock, natural disaster, new competitor, new regulation, a cyberattack on the company. The list goes on.
If you’re 100% invested in a single company one short-term issue could blow your portfolio up and force you to sell (possibly right before the company recovers).
People ask me regularly about how large position sizes should be, how they should start positions (all at once, buy in thirds, etc), and other portfolio management questions.
These are all personal and different for everyone.
However, each week I share my portfolio and position sizes which should help you understand how confident I am in each position.
But no one should just blindly copy the same positions or position sizes as me or anyone else. You have to build your own conviction and be comfortable with your investments.
Each week I’ll also talk about tips and lessons learned for portfolio management which should also help in your own decision making.
Today I’ll share two important thoughts.
Thought #1: is a quote from Warren Buffett
Don’t risk what you have and need in order to pursue what you don’t have and don’t need.
This is a good one. It’s so tempting to take the short cut to “getting rich” like going 100% into the next hot stock.
But is it really worth the risk of blowing up your entire portfolio when instead, we could use 100+ years of stock market history to our advantage and aim to own 10 - 25 of the best businesses we can find?
Sure, it might take a little longer, but your likelihood of ACTUALLY building long-term wealth (and not have anxiety attacks or losing sleep) is so much higher if you diversify a bit.
Thought #2: is establishing your “sleep number”
Your investing sleep number is a concept David Gardner of The Motley Fool shared on his Rule Breaker Investing podcast. Your sleep number is the largest amount of money you could have in a single stock without causing too much stress in your life and without losing sleep.
If you find yourself checking your stocks when you should be doing something else, or tossing and turning becuase your stressed at night, you should probably go ahead and lower the size of the positions giving you that stress.
Trust me, your life will be better because of it.
Full Portfolio, Position Sizes, and Trades This Week
Current Portfolio
No changes to the portfolio this week. We have NVO and MELI which are both 19%