Sunday, January 01, 2023

2022 Year End Performance

I’m sure everyone is glad that 2022 is over and we can have a fresh start in 2023. My portfolio generated a loss of -14.14%, which I am not happy about. It could have been worse with the S&P 500 declining -19.4% and the NASDAQ -33.1%. In this game, it’s all about minimizing one’s losses and having sufficient capital to participate the next bull market. I just don’t see a bull run until the Fed starts easing rates. I will most likely just play it safe and continue to do what I have done this past year by selling puts / calls and merger arb plays. And with yields this attractive, I’ve actually started buying T-bills for the first time. You just can’t go wrong with T-bills generating ~ 4% return with absolutely no risk.

My portfolio is really boring as it is stagnant with little to no turnover. I am a buy and hold investor in mostly dividend paying stocks, which is how you truly make the big money over the long term. I reinvest the dividends in additional shares and the compounding effect over time is really incredible. For example, I bought Visa at the ipo price of $11 (split adjusted) and with the company now paying $1.80 in annual dividend, this comes out to an annual ~16% yield on the original shares. So be skeptical of anyone who tells you that buy and hold is a bad strategy.

The only position I totally sold out of is Alibaba, which I basically broke even after holding for several years. If you consider the time value of money, I actually lost money over time. I should have sold when the government stepped in and pulled the Ant ipo. I’ve learned my lesson in investing in a country that is ruled by Communist leadership, just don’t do it!

I was very active in selling puts and calls in high volatile tech stocks. The majority of the options trades were in Tesla. If you take a look at the volume of options activity in Tesla, it’s simply amazing. It’s literally a giant casino out there. The gains in my options play covered the losses in Airbnb and Ginkgo Bioworks. I realized a loss of -39.2% in Airbnb and -83% in Ginkgo Bioworks. These were tax loss harvesting sales to lower my capital gains tax. I still have positions in Airbnb and Ginkgo Bioworks so I obviously still like both of these companies. Airbnb is cash flow positive so it will do fine over the long term. Ginkgo Bioworks is my speculative play and I intend to hold on for the long term. Ginkgo Bioworks is the leader in the synthetic biology space and many under appreciate the work that this company is doing. As long as the Ginkgo Bioworks founders are with the company, I’m staying along for the ride.

Here are my current boring holdings:

So wishing everyone a Healthy, Happy and Prosperous New Year!  

2022 Performance = -14.14% with the running monthly returns as follows:

January -0.68%
February -6.00%
March +4.89%
April -4.41%
May -2.90%
June -7.28%
July +12.5%
August -3.1%
September -9.5%
October +11.55%
November +1.52%
December -8.81%

Annual performance for the past eleven 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%
2022 -14.14%

CAGR from 2012 to 2022 = 24.77%