In 2011, wife & I quit teaching, rolled over 403(b)’s.
Since then:
💰Never earned more $$ than 2010.
🏠Bought House
👩👩👧👦Started family
BUT, also since then...
Our roll-overs have 10-BAGGED
Surprising lessons on how we did it 🧵
Since then:
💰Never earned more $$ than 2010.
🏠Bought House
👩👩👧👦Started family
BUT, also since then...
Our roll-overs have 10-BAGGED
Surprising lessons on how we did it 🧵
1/ It wasn’t a straight line.
2012=9% returns
2013=28%
2014=(4%)
2015=(2%)
2016=0%
From 2011 to 2016 (FIVE YEARS), entire rollover was up only 30%
Annualized = 5%
S&P 500 during that time = 12% *per year*
2012=9% returns
2013=28%
2014=(4%)
2015=(2%)
2016=0%
From 2011 to 2016 (FIVE YEARS), entire rollover was up only 30%
Annualized = 5%
S&P 500 during that time = 12% *per year*
2/ In 2016, two things changed.
@DavidGFool asked me to vote on a @themotleyfool service for stocks
I read @nntaleb’s ANTIFRAGILE
I needed a framework to intelligently vote for @DavidGFool’s service, and @nntaleb’s work provided that.
I started working on the framework
@DavidGFool asked me to vote on a @themotleyfool service for stocks
I read @nntaleb’s ANTIFRAGILE
I needed a framework to intelligently vote for @DavidGFool’s service, and @nntaleb’s work provided that.
I started working on the framework
3/
Assumptions of FRAMEWORK
* The future = 100% unpredictable
* I’m measuring companies, not stocks.
* One or two events will account for 90% of what happens in the real world (i.e. COVID)
Kept LARGE cash balance (~6 months expenses) entire time, family lived frugally
Assumptions of FRAMEWORK
* The future = 100% unpredictable
* I’m measuring companies, not stocks.
* One or two events will account for 90% of what happens in the real world (i.e. COVID)
Kept LARGE cash balance (~6 months expenses) entire time, family lived frugally
4/
That meant I had to STOP
🛑Buying/Selling Often
🛑Buying WITHOUT writing my reasons down
🛑Worrying about valuation
🛑Paying attention to what most others thought of my decisions (while still leaving room for doubts)
This wasn't easy. But I replaced these with others...
That meant I had to STOP
🛑Buying/Selling Often
🛑Buying WITHOUT writing my reasons down
🛑Worrying about valuation
🛑Paying attention to what most others thought of my decisions (while still leaving room for doubts)
This wasn't easy. But I replaced these with others...
5/
Every stock needed the following
1) BARBELL APPROACH
Mission statement
Wide Moat
Optionality
2) FINANCIAL FORTITUDE
Lots Cash, Little Debt, Positive FCF
No concentration risk
3) SKIN IN THE GAME
Founder-led
High Insider Holdings
Good Glassdoor ratings
Every stock needed the following
1) BARBELL APPROACH
Mission statement
Wide Moat
Optionality
2) FINANCIAL FORTITUDE
Lots Cash, Little Debt, Positive FCF
No concentration risk
3) SKIN IN THE GAME
Founder-led
High Insider Holdings
Good Glassdoor ratings
7/ BARBELL is the most important:
Mission statement needs to be:
* Simple (can direct any decision)
* Inspirational (more than making $$)
* Optional (where creativity comes in)
Moat = Company's DEFENSE against competition
Optionality = Company's OFFENSE with opportunities
Mission statement needs to be:
* Simple (can direct any decision)
* Inspirational (more than making $$)
* Optional (where creativity comes in)
Moat = Company's DEFENSE against competition
Optionality = Company's OFFENSE with opportunities
8/ Getting a score
When all is said and done, this spits out score.
This doesn’t GUARANTEE great results, but it TIPS THE SCALE in my favor.
I hold companies that -- when sh*&% hits the fan -- I believe can actually benefit.
The hard part = waiting.
When all is said and done, this spits out score.
This doesn’t GUARANTEE great results, but it TIPS THE SCALE in my favor.
I hold companies that -- when sh*&% hits the fan -- I believe can actually benefit.
The hard part = waiting.
9/
Between start of 2016 and end of 2019, results were better.
2016= 0% returns
2017= 46%
2018 = 8%
2019 = 62%
Annualized = 26% in 3 years
Big gains came from $AMZN and $SHOP -- both demonstrated their moats and, more importantly, their OPTIONALITY (AWS, Merchant Services)
Between start of 2016 and end of 2019, results were better.
2016= 0% returns
2017= 46%
2018 = 8%
2019 = 62%
Annualized = 26% in 3 years
Big gains came from $AMZN and $SHOP -- both demonstrated their moats and, more importantly, their OPTIONALITY (AWS, Merchant Services)
10/
Despite this, I was always talking about how being flexible when CHAOS hits would prove this framework worked. But no chaos
Then, 2020 hit.
The 10 stocks I identified as being the most Anti-Fragile AVERAGED a triple.
My 2020 rollover returns = 112%
fool.com/investing/2021…
Despite this, I was always talking about how being flexible when CHAOS hits would prove this framework worked. But no chaos
Then, 2020 hit.
The 10 stocks I identified as being the most Anti-Fragile AVERAGED a triple.
My 2020 rollover returns = 112%
fool.com/investing/2021…
11/
Those ten stocks and their returns since 1/1/20, by the way, were/are:
$AMZN - 81%
$SHOP - 285%
$MELI - 226%
$SE - 700%
$CRWD - 466%
$ZM - 400%
$GOOG/L - 116%
$FB - 82%
$TEAM - 198%
$AXON - 155%
NB: $ZM, $CRWD, $SE weren’t rated until after 1/1/20
Those ten stocks and their returns since 1/1/20, by the way, were/are:
$AMZN - 81%
$SHOP - 285%
$MELI - 226%
$SE - 700%
$CRWD - 466%
$ZM - 400%
$GOOG/L - 116%
$FB - 82%
$TEAM - 198%
$AXON - 155%
NB: $ZM, $CRWD, $SE weren’t rated until after 1/1/20
12/
Hasn't stopped. YTD, the roll-over is up 32%.
Up:
180% since January 1, 2020
354% since January 1, 2019
615% since January 1, 2017
Altogether, it is up 830% -- or 9.3X where it started.
The annualized returns = 26%. Those returns over 10 years (4 more months) = 1,000%
Hasn't stopped. YTD, the roll-over is up 32%.
Up:
180% since January 1, 2020
354% since January 1, 2019
615% since January 1, 2017
Altogether, it is up 830% -- or 9.3X where it started.
The annualized returns = 26%. Those returns over 10 years (4 more months) = 1,000%
13/
An element of luck IS involved.
🍀Invested in one of the longest bull markets ever
🍀I was patient enough to let my thesis on these companies play out
🍀It could just be that my type of investing favored a sector that did well b/c of COVID
But I’m thrilled with the returns
An element of luck IS involved.
🍀Invested in one of the longest bull markets ever
🍀I was patient enough to let my thesis on these companies play out
🍀It could just be that my type of investing favored a sector that did well b/c of COVID
But I’m thrilled with the returns
14/
My 5 largest holdings today = 50% of all holdings:
$SHOP = 17%
$MELI = 10%
$CRWD = 8%
$SE = 7%
$AXON = 6%
By now, you hopefully understand why those stocks have those spots.
My 5 largest holdings today = 50% of all holdings:
$SHOP = 17%
$MELI = 10%
$CRWD = 8%
$SE = 7%
$AXON = 6%
By now, you hopefully understand why those stocks have those spots.
15/
Today, @BrianFeroldi & I help teach others how to do this.
We have a YouTube channel devoted to spreading financial wellness and publishing the (unwritten) rules of finance.
In fact, we just published a video about measuring ourselves as investors
Today, @BrianFeroldi & I help teach others how to do this.
We have a YouTube channel devoted to spreading financial wellness and publishing the (unwritten) rules of finance.
In fact, we just published a video about measuring ourselves as investors
16/
We also make our frameworks available for anyone to copy.
You can download your own copy here. It’s name your own price (INCLUDING FREE). We appreciate payments, but don’t want it to stop anyone from benefitting.
brianferoldi.gumroad.com/l/zWXye
We also make our frameworks available for anyone to copy.
You can download your own copy here. It’s name your own price (INCLUDING FREE). We appreciate payments, but don’t want it to stop anyone from benefitting.
brianferoldi.gumroad.com/l/zWXye
In summary:
My investing results have required:
👉PATIENCE
👉FOCUS ON ANTIFRAGILITY
👉FOCUS ON BUSINESS, NOT STOCK
From 2011-2016, CAGR = 5%
From 2016-2019, CAGR = 26%
Since 2020, CAGR = 86%
From 2011-Today
* 26% returns (CAGR) vs. S&P 500 14% (CAGR)
OR
* 830% vs 258%
My investing results have required:
👉PATIENCE
👉FOCUS ON ANTIFRAGILITY
👉FOCUS ON BUSINESS, NOT STOCK
From 2011-2016, CAGR = 5%
From 2016-2019, CAGR = 26%
Since 2020, CAGR = 86%
From 2011-Today
* 26% returns (CAGR) vs. S&P 500 14% (CAGR)
OR
* 830% vs 258%
Whoops, should be 900%, which -- b/c investing math is weird -- is a 10-bagger
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