Monday, November 14, 2022

October 2022: Portfolio Performance, Net Worth

Throughout October, I spent much of my free time inputting all of my trades into the application Portfolio Performance.

I wanted to answer the question: am I any good at this? What have I gained by trading individual stocks? I'm not interested in bullshitting myself or anyone who reads this, and so despite the tedious nature of inputting hundreds of transactions and the RSI issues of sitting at a computer that long, I just took the time and did it.

The answer was mixed.

There were many times that I groaned at an ill timed buy or sell. But there were also times when my instincts served me well and saved me from a painful drawdown. It's not a stellar record by any means, but it's not horrible either for someone who barely knows what he's doing.

To summarize: I stumbled along and avoided doing anything disastrous. However, all my efforts added up to underperforming the S&P significantly.

One major takeaway is how fees add up. In my Interactive Brokers account, I've paid over $1,000 just in fees since 2017. Their fees are low, so it's hard to see just how they add up over time. That doesn't include interest costs from using margin either.

It's also clear that maintaining a steady asset allocation somewhere in there is important. The decision to implement the Wiseguy Portfolio was a good one. I'm a mediocre stock picker, and I shouldn't keep all my money in individual names.

The project isn't totally finished; I still want to enter my high yield savings account, since that has been my preferred holding place for cash the past few years. I also need to include the loan I took out, but that's trickier. My goal is an honest accounting, but that's easier said than done.

Here's an image for you though:

Image: Portfolio performance in 2022

Notice how the blue line drops a bit then flat lines with small ticks upwards? That's my IRA gone to cash in February 2022 when the trend following rule was hit and receiving monthly interest payments. This tweet from Cliff Asness sums it up:

Net Worth

As of October 31, our net worth rose in October 4.06% in USD and 3.14% in EUR to $121,828 and €123,220 respectively. Liquid net worth sits at $93,016 and €94,078.

Image: Net worth chart in USD

The stock market did well, and my various portfolios also performed well:

Image: October's portfolio performance chart

You can see that they underperformed the S&P 500 (red line), though my individual stock holdings (yellow line) traded places throughout the month. The Wiseguy Portfolio (green line) fared less well.

The euro strengthened, which lowered the value of USD assets relative to euros and raised the burden of our euro debt relative to dollars. However, my general belief is that I win either way: a strengthening euro is a raise for my income, while a strengthening dollar makes me richer in Europe. It's not a terrible position.

Image: net worth chart in euros

Portfolio Changes

After selling Store Capital at the end of September, I used the money to add to Enbridge, Alphabet, Lowe's and Ally Financial while starting new positions in Pepsico, Exxon Mobile, and Cloudflare.

Purchases

I bought an iPad Air. I love the thing. They've improved so much since my last iPad, and I used Amazon's incremental payments scheme to spread the cost over five months (reflected in the additional euro liabilities burden).

November Outlook

There have been some big portfolio changes in November, sadly. Namely, I sold Ally and spread that around to other companies. That was a long holding, and I hope to re-enter one day, but I would like to lower my tax burden before the end of the year, and selling at a loss can do that.

Otherwise, it's a normal month. Until next time, take care of yourselves and those you love.

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