COBF 2020 Returns (pre-tax, after fees, etc)

[SharperDingaan]

Far too early for this, but > 100% TWR in the equity portfolios, net of a return of capital.

We weren't 'investing' as in 'buy and hold'. We were primarily swing trading to lower cost bases and build share count.
'Donny' was very good to us with his 1700-2000 point daily swings, as was Bitcoin, WCP, CPG, and most other oil/gas. Even PD and OBE net of consolidations, and recent run-ups!. Today we have large share counts (for retail) in very good companies, record cash sitting in FFH stock, and a healthy CAD/Pound FX hedge going the right way. Over the next 12 months, most of it will be partially reinstating dividends as well. We will be eating well for a very long time!

The big take-away this year, was the value of returning capital right after a run of obscene trades. Short-circuiting the corruption of fast money worked very well for us, and it benefited a lot of people. It will benefit us again this tax season.

Every day, something new.

SD


 

[writser]

Here we are, the day of reckoning! First of all, I'm a bit surprised that currency is neglected in the topic again. Euro returns are quite a bit worse than dollar returns in 2020 due to all the money being printed by uncle Sam. When John (my condolences) says he is down 3% I assume that that is in EUR, which means a performance in dollar of about +6%. Quite a difference.

Anyway. My after-tax net return is about ~5% in EUR or ~14% in USD. I don't really keep track of pre-tax / post-tax returns - I only manage my own money, I pay a flat wealth tax and my goal is to minimize after-tax returns so I include stuff like tax credits generated during the year in my portfolio performance. My ten year CAGR is now about 18.x% without a single down year.

My style can best be described as 'garbage sifting'. That's not really a style I expect to outperform with in a raging bull-market. And it didn't . I'm reasonably happy with what happened in March: even though I was about fully invested (as I almost always am) and some special situations went bust my portfolio wasn't down a crazy amount and I could still sleep very well. Mostly I kept on doing what I always do. I'm not the guy who makes big calls, macro bets or bold 'recovery plays' or whatever.

What was very frustrating this year though (investing-wise - overall it was actually very satisfying) was having a one year old kid. Before the kid I used to work in the living room. Well, guess how that worked out early 2020. The shit hits the fan, markets are down 5% a day, country goes in lockdown, daycare closes, and both me and my wife try to work in the living room while a one year old is eating and destroying everything in sight. Good luck trying to analyze a mortgage REIT when your kid is obsessed by the blue power button on your computer. Biggest crisis of the decade but for me it was basically impossible to get into the right frame of mind and find the time to do some serious work. We ended up making a small office upstairs where we split our time. Still, we are again in lockdown now and again it is very hard to get serious work done. I've looked into hiring some office space during the year and maybe that's something I have to reconsider this year - especially given that there's another kid on the way.

This whole work-from-home situation led me to being frustrated and tired too often, which led to some unforced errors and sloppy due diligence. And I find that grating. I'm perfectly content with looking in the garbage can while others are up 500% with Tesla or whatever but at least I'd like to feel that I gave it my best effort and that wasn't always the case this year. So, overall I'm a bit salty. I need to find a better investing / life balance and if that doesn't happen during the next few years I will consider renting an office, outsourcing my investment work, putting it on hold or changing my style to be a bit more passive / low turnover. I like what I do and I'm confident that my approach to investing has its merits and a risk/return profile that I am content with so probably I will just go on but I'm keeping my options open. The end goal is to maximize happiness in life, not performance on the stock exchange. So far these goals have always more or less aligned for me as I love doing this but in 2020 that wasn't always the case.

Also, this is probably something for another topic but I didn't find this forum a particularly compelling / value-adding place to be in 2020. I find myself spending less and less time here and moved on to some other places. Maybe that's just me being a sore loser though in 2020! Thanks to thepupil for opening thousands of interesting real estate threads this year. Also, the GRIF thread was great, polite and worthwhile. You guys got me very close to buying but I never pulled the trigger. And a big shoutout to alwaysinvert for having lots of cool original Skandi ideas. Really happy with my Treasure ASA position this year and I think it has great prospects for 2021. Also a shoutout to Gregmal. Seems like he actually got more reasonable and nuanced here during a year in which a lot of people didn't. Didn't see that coming - that's probably me being fixed in my own ways. This just from the top of my head - please don't feel offended if you helped me in some way or another or posted cool stuff and I didn't mention you.

And finally a shoutout to all the people working in daycare. I seriously think I would have a burn-out within a week.

Onwards to 2021. Looking forward to it!

[chrispy]

31% in my managed accounts
40+% in Employer 401k

Made the decision early on to put my entire 401k into cash as the markets were still slightly positive and the downside seemed tremendous if shut downs happened. 

Had a child on Mar 20th and the hospital at the time was the most eerie place I have ever spent time. Deserted and nothing but ominous talk of the virus on the way. No one was wearing masks at the time.

Based on that, I am quite proud I was able to deploy all capital shortly after near the bottom. Bought higher quality companies so I could set it, forget it, and take care of my family and other life demands.

What is amazing about 2020 is I could have easily had -10 to 10% returns and also could have had >70% returns.

I have learned a tremendous amount during 2020 with regards to investing and businesses.  We all saw an entire business cycle in 9 months. Thank you to everyone on this board for their contributions.

[Spekulatius]

I am at a hair less than 10% this year. One excuse is that I managed it with way less volatility than the SP500. I am happy with the result,  it could have been way better than that. This year was the year for the bold but I can’t afford 50% hits in my age.

Pluses were waiting out some declines from early to mid March and mistake was waiting too long until the end of April to do something and partly those went into the wrong sectors (not tech heavy enough, defense stocks etc).

I am pretty happy with my portfolio as is right now and I think everyone who made some money, stayed healthy, and has a job is a winner in my book.

[deleuze68]

Thank you for that post writser as so much resonates with me and I don't even have a child (although I was taking care of my 2 year old niece twice a week in the Spring to relieve some pressure on her WFH parents).

As for myself, I was up 30% on the year. I had actually sold a bunch of holdings in January/February as the market was looking a little frothy. This ideally positioned me for the March drop but unfortunately everything just moved so fast that I never had the opportunity to fully take advantage (other than a bunch of quick in and out swing trades). Most of the year's gains came from purchases made in June/July as things settled down and as I was able to pick away at some market laggards.

[Gregmal]

+1 of the curveball with kids and WFH. I literally was doing 9:30-4s from my car w/ WiFi for good chunks of the year. Always adapting lol.

[s8019]

I'm reasonably happy with what happened in March: even though I was about fully invested (as I almost always am) and some special situations went bust my portfolio wasn't down a crazy amount and I could still sleep very well.

Unfortunately, I'm not so smart, so I just stopped checking the quotes for my portfolio for a while (except for the stocks that I wanted to sell anyway). I knew that I was down, probably by a lot, but only a couple of months later I found out that my portfolio was down by a whopping 40%+ YTD by mid-March. However, there was no point to look at it back then. It was kind of obvious (I've checked my notes from the time) that barring a nuclear war scenario the value was still there, either in terms of long term cash flows or balance sheet or whatever you do to value stocks. So assuming that stocks are not just pieces of toilet paper circulating in an outlandish global casino but represent a stake in some business there was no point to self-torture by way of constantly refreshing panicky mark-to-market prints of my portfolio holdings.

As for the kids, we hired a nanny for a few months. It cost us a small fortune, but eventually, it was worth every single euro cent. Neurons are not compounding, unlike investments.

[KJP]

2020:  14%

Historical
2020: 14%
2019: 31%
2018: 11%
2017: 10%
2016: 22%

Largest positive 2020 impact on portfolio:  Griffin Industrial, Charter, IES Holdings, Rosetta Stone, Parkit, Williams, IAC
Largest negative 2020 impact on portfolio:  Black Stone Minerals, Wells Fargo, Hill International

After a good 2019, I was fat, lazy, and unprepared in March, which led to some poor investment decisions, poor portfolio management, and missed opportunities.  Hopefully I've learned a few lessons.

The distribution of returns in the voting is interesting.  If the S&P is down, say, 15% next year, will we have the opposite negative skew to returns (a fat tail with -50% returns), or have board members mastered catching big upside while avoiding big downside? 

[Broeb22]

Ive read in a few places that like 85% of the markets returns occur during something like 10% of its trading days.

This is kind of besides the point, but I believe that quote you always see from CNBC about "you gotta be in the market because the 10 best days account for all of the return in any given year". It's such a cherry-picked fact. When did those trading days occur? Probably during periods of heightened volatility where the market was swinging up and down wildly. So in order to get the best trading days you had to stomach the worst trading days too.

I've never actually looked at this before, but it confirms my suspicion about the "best trading days" garbage CNBC feeds retail investors.

The attachment shows the 2020 trading days ranked in order (by absolute value of returns) and shows you that the best and worst days were clustered around March and April with a few exceptions outside that time.

[Spekulatius]

Ive read in a few places that like 85% of the markets returns occur during something like 10% of its trading days.

This is kind of besides the point, but I believe that quote you always see from CNBC about "you gotta be in the market because the 10 best days account for all of the return in any given year". It's such a cherry-picked fact. When did those trading days occur? Probably during periods of heightened volatility where the market was swinging up and down wildly. So in order to get the best trading days you had to stomach the worst trading days too.

I've never actually looked at this before, but it confirms my suspicion about the "best trading days" garbage CNBC feeds retail investors.

The attachment shows the 2020 trading days ranked in order (by absolute value of returns) and shows you that the best and worst days were clustered around March and April with a few exceptions outside that time.

If you state how much of the market return occurs in a few best days, you also need to state how much of a decline you could have avoided being out of the market for the few worst days to make this assessment more symmetrical.,