Sunday, January 02, 2022

2021 Year End Review

2021 was the year of the index as the S&P 500 returned ~ 26.9%, which beat just about everything out there. I was able to squeak out a gain of ~ 13.58% for the year. I’m actually quite pleased with this return event though it considerably underperformed the overall market. My trading style continues to evolve as I shifted more from the M&A / special situations plays to pocketing option premiums in high volatility stocks. As an investor / trader, you need to adapt to various market conditions. I still maintain an overall buy and hold strategy.

I’ll first start off with my current long holdings. I did sell off my Sanofi position and initiated a position in Gingko Bioworks. Sanofi just blew it with their Covid vaccine development. Ginkgo Bioworks will be years away from profitability, but I am willing to be patient with this one. Ginkgo Bioworks could possibly disrupt the biotech business model in this new synthetic bio space. The volume of genetic code that this company compiles is enormous, and this data will become more valuable over time. This is underappreciated by the market. Ginkgo Bioworks is definitely speculative as I rarely go into early stage companies, but I really like the founder’s vision.

Apple surprisingly was a standout performer while everything else was lagging. Apple pretty much saved my portfolio. I was really expecting Visa and Mastercard to perform at least in line with the market, but they just sputtered. I know I have said that Visa and Mastercard were never sell positions for me. I am not blind and do see what is happening in the Fintech space. I can see Stripe and Plaid encroaching into the credit card payment space. I will likely initiate positions in Stripe and Plaid if / when they go public as I see these as major disruptors to Visa and Mastercard.

I can’t forget about Alibaba… Geez where do I begin. The Chinese government just destroyed the company. I am still profitable on the position (for now), but I am looking to dump this position. When you have a government that is anti- shareholder that is a problem. China is an enormous and is a rapidly growing market, but how can you invest with the current Chinese administration in power. Just not shareholder / market friendly.

I also ventured into the private equity space. This is definitely speculative as some of these companies may never IPO or have a liquidity event so you will be stuck with an illiquid security. Of course, I expect some of these companies will go public and hopefully the public market values it well above the private markets. I can’t really say too much about these until a liquidity event occurs.


Holding

% Portfolio

AAPL

38.44%

ABNB

4.25%

BABA

1.97%

DNA

1.68%

MA

6.37%

QGEN

1.84%

STZ

18.45%

V

18.89%

Private Equity / Pre-IPO

6.63%

Cash

1.46%

 

Now to selling options. I’ve been aggressively selling naked Puts on high volatility stocks such as Tesla. I mainly focused on the weekly options as I want to close out the position by the end of the week. I first started out by selling way way out of the money Puts and generating a small income with low risk (probability of expiring worthless at ~ 98%+). I gradually started focusing on options with a probability of expiring worthless at ~ 90%+). I kind of settled into this options delta as I can somewhat sleep at night without worrying too much, but of course a black swan event can still occur and inflict some serious damage. I’m going to start buying some protection (buying Puts) in these options positions. As I reflect back, I was really lucky that none of these positions blew up on me. In all these option plays contributed a positive ~ 1.8% to my portfolio return.

That was my report card for 2021… I give it a C-.

 

Hopefully everyone out there will have a Happy, Healthy and Prosperous New Year.

 

2021 Performance = +13.58% with the running monthly returns as follows:

January -2.1%
February +0.6%
March +0.99%
April +5.77%
May -3.56%
June +4.0%
July +2.23%
August -2.8%
September -2.1%
October +2.8%
November +1.65%
December +5.89%

Annual performance for the past nine years is as follows:

2012 +61%
2013 +44.61%
2014 +29.47%
2015 +33.48%
2016 +14.61%
2017 +42.12%
2018 -4.11%
2019 +40.17%
2020 +32.81%

2021 +13.58%




CAGR from 2012 to 2021 = 29.52%


3 Comments:

At January 15, 2022, Anonymous Anonymous said...

Such a fantastic CAGR! I've been in DNA and QGEN too and feeling your pain there recently.

 
At January 16, 2022, Blogger Money Turtle said...

Thanks...

DNA - Really like the founders vision. You need a long term view for this type of company. I rarely ever invest in companies that are not generating sales and profits. This is one exception.

QGEN - It's a fairly mature company at this point. They benefited big time from Covid. They will most likely get taken out at some point.

 
At March 09, 2022, Blogger Sachin Gupta said...

Its one of the best informative blog!
lic ipo date

 

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