I took 24 days away from the market over the Christmas/New Years period which was refreshing but it feels good to be back into it! For anyone wondering it took me 4 hours to catch up on the entire Strawman feed. I spent the weekend going over my performance in 2021 and wrote down some learning's, the good, the bad and the ugly.

2021 was a rather transformative year for me. I’ve never spent more time in the markets than I did in 2021. Although I’ve been investing since 2011, I didn’t really get into it until 2016 and even then I’d say I didn’t know what I was doing until 2020.

Forced Seller - In January of 2021 I decided that I wanted to buy my first home, my previous house mates were moving out at the end of March and I was sick of moving house every 12 months (I was also sick of them breaking all my shit!). This was my first mistake of the year. I was selling down stocks from my portfolio whilst getting pre-approval for my home loan and I quickly realised that I was becoming a forced seller during the initial tech sell down of March 2021. I don’t know how many times I’ve read “don’t invest money you need in the next 1,2,5 years” but the rather quick decision to buy a house caught me a little off guard. Ultimately personal reasons got in the way of my investing life.

Selling Winners Too Early - I was an early believer in lithium stocks & had held GXY & PLS on and off since 2016. Unfortunately, I sold all my positions in Dec 2020 – Jan 2021. I left many bags on the table here. I failed to recognise just how big this thematic would be and just how much momentum plays in a stock’s performance. Once again, I find myself regretting selling my winners too early.

FOMO - I got caught up in some IPO hype with NXL (The PLTR of the ASX!). I was buying this for $9-$10 and thought boy what a great story and what a great company this will be. I got suckered in after watching earlier IPO’s (ART) boom so thought this was a sure buck. As soon as the first downgrade came out, I sold. And looking back I’m impressed that I did sell. It’s often hard to admit that you are wrong and sell your losers but I’m much less emotional with investing these days than prior years. The stock market doesn’t care what price you paid so don’t hang around waiting to get your capital back.

Development - From 2020 and throughout 2021 I found myself moving away from the “big end of town” and focussing on small caps which sparked my interest. I used to invest primarily in the top 200 companies because I perceived these as “safer” and anything outside was too speculative for a retail investor like me to profit from. Looking back on my previous investing style I really had no idea what I was doing. I’d look at a PE and if it was below 20 I’d think it was cheap and if it was above 30 I’d think it was expensive (maybe this is a little harsh on myself but it highlights the point). I really dove into financial statements, different valuation methods & the intricacies of a business such as operational leverage and delaying profitability on the bottom line to capture market share. I built my first DCF (Kogan I believe I posted on here) and quickly realised how useless a DCF can be. But I am so glad I learnt the process as it took me from the top line to the bottom and everything in between.

Performance- Although my returns for CY21 have been relatively lackluster my returns for FY22 have been market beating. I primarily invest in disruptive growth companies so to have a return >10% in my PF during FY22 when many of these stocks have been beaten up I’m happy with. I hold much higher conviction in my holdings these days than previously. One of my favourite quotes is “You can borrow an idea but you can’t borrow the conviction”.

Although my performance over the past 6 years or so has been better than my performance in CY21 but I know that I am a far better investor now than I ever have been. Also 1 year too short of a timeframe to truly assess performance. Another quote I like is “You can be right for the wrong reasons”.

Technical Analysis- Another tool I added to the toolbox in 2021 was technical analysis. I won’t go into much detail here but I do think technical analysis can play a part in portfolio construction. Maybe I’m just drawing lines on a graph that mean nothing, but I can’t help but feel like levels of support and resistance can help me “time” my entries & exits better. This did open a can of worms in regard to trading vs buy and hold which I posted to Strawman HERE.

Strawman- Since joining Strawman premium I told myself I’d be much more active on here and I think I’ve achieved that. It’s been priceless to be able to bounce ideas around and get some incredibly unique insights. So thank you Andrew and the rest of the Strawman community for everything.

I said to myself earlier in the year that I’d make Stawman align with my personal PF. I haven’t done this very well at all. Going forward all new holdings in my personal PF will be reflected in my Strawman PF. I was using the Strawman PF as a means to learn about a company more when I like the story of a stock. I’d like to see my returns in Strawman more reflective of my actual PF whether it be for better or for worse so I can be held more accountable.

Crypto- Lastly, I finally bit the bullet and started to dive into the Crypto space. At the time I didn’t realise what a rabbit hole this would become. I look forward to seeing how this develops over the coming decades. And Yes, I paid $12 for my “Ginger Stonk Man” NFT profile picture, I figured it was a good excuse to experience the process and get a picture for Strawman.

The crypto space did highlight the opportunity cost of holding underperforming assets. In analysing crypto I often look at the charts compared to another crypto. Say for example ETHBTC which graphs the ETH price relative to BTC. This really got me thinking about my holdings in the share market and again opened up a can of worms in regards to “diversification” and the number of holdings in my PF.

Overall, I’m very happy with my personal development and the performance of my portfolio in 2021 but no doubt still have barely scratched the surface. I’m looking forward to learning more in 2022 and becoming an even better investor.

Cheers to 2022

Cal