Annual Letter 2023

Annual Letter 2023 Introduction 2023 will shortly be coming to a close leading to my first ‘annual letter’ which I intended to write from the point of starting my personal website. Whilst the year has flown by, there is much to reflect on, and whilst I feel that this year in particular has marked a turning point in my life there are many areas of improvement and many lessons learned. Below I will reflect on some of the most important learnings.

Reflections The start of 2023 was far different to my current situation today, I was working in heavy industry sweating for the best part of 12 hours per day as a furnaceman. Whilst I enjoyed my job and the reward of creating ingots by hand, I knew it was not my calling as I had been interested in finance since I finished my law degree. After five years of working in a foundry, my original motivation to earn good money for a year or so was turning into a career dead end. I had entered the industry thinking I could pursue my hobby as an amateur solo investor and still achieve greatness.

Unfortunately, one year turned into two which turned into three, four, five... time was slipping away faster which leads to my first reflection: Time moves fast, do not stagnate in the comfort and convenience of your current environment.

Secondly, the environment I was working in wasn’t exactly a place of positivity and motivation and aspirational people. Don’t get me wrong many of the people I encountered there were true characters and will live on in my memory for the rest of my life, but they certainly did not push me to achieve greatness. Many were happy in their surroundings, or, at least, not willing to push themselves to find something better. Many have only worked in foundries’ and are not willing to push to see what lies outside their comfort zone. To push on was even mocked or frowned upon by some within the company. Simultaneously those people only complained about their circumstances whilst doing nothing to change it themselves. It is said that you are a reflection of those you closely associate yourself with and unfortunately that is true. Whilst I was conscious of negative influences it is hard to maintain such a barrier and far easier to fall in lines with those around you. In order to flourish it was essential I get out of my own way and move on from foundry life. Thankfully I got that break in January after job hunting for several months – I started my career there in March. The reflection here is: Those you associate with in both your personal and work life have a massive influence on your ability to progress. Avoid negativity at all costs.

Related to the field of investing I have spent the whole duration of 2023 dealing with the Celsius bankruptcy that I am embroiled with. Whilst I knew the situation would take a while to resolve I certainly did not expect it to take as much time as it has. As of December 2023, the case is still ongoing and will likely go on into 2024. Whilst Alex Mashinsky is certainly to blame for running the company into the ground and will likely serve multiple years behind bars I am also to blame. I did not do my due diligence on the company with which I put a substantial amount of my net worth and for this I have learnt a hard lesson: When investing it Is essential to understand counterparty risk. If you cannot assess the risks, do not invest or associate yourself with the company or product.

Overview

What I did well   

I definitely achieved what Charlie Munger calls ‘Sit on your Ass’ investing. I was very inactive.

I did not sell a single position and I have reaped the rewards from this.

After a terrible 2022 I have outperformed all major equity indexes making it a 3 out of 4-year streak.

Continued to add content to my personal website increasing my library of personal work.

What I could have done better     

I could have started ramping up my personal fitness before September 2023. Much better results would now be showing.

More proactive in my investing ambitions and started my website later than originally planned.

Maintained a much cleaner diet – whilst consistent for periods of time the vast majority of year could be considered choppy.

Did not read enough books – averaged less than one book per month. Whilst I did read several books my achievement here was lacklustre.

Did not review enough public limited companies to increase my watchlist. Whilst my watchlist has increased, more time should have been spent doing stock analysis.

What I want to achieve in the coming year 

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Continue increasing my fitness focusing on increasing my functional strength through kettlebell training, cardiovascular endurance through running and flexibility through stretching.

Increase my watchlist of solid companies I would like to invest in.

Do the very best I can in allocating my capital.

Top five predictions Whilst predictions often fail to materialise, they are still fun to do and often sheds light on my own inability to predict the future. I also find it fun to reflect on in the future as my old way of thinking is highlighted and the flaws are clear to see. Never the less here they are: 

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The Reverse Repo Facility will hit 0 by February 2024. Crisis will follow and the Federal Reserve will step in. With the lowering of rates, I think the 3x 25-point rate cuts will have to be exceeded here that were announced on December 13 th of 2023 by Jerome Powell.

Bank Term Lending Facility in the US will be extended allowing banks to borrow against their destroyed bond portfolios at par going into the future.

As the Reverse Repo Facility reaches 0, stimulus for treasuries auctions in the US will seize up leading to rate spikes once again.

Inflation will start to reignite in the US by the end of 2024.

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Bitcoin will reach a new all-time high.

I expect to fall short on some of these points. Let’s see what 2024 has in store for us all!