March was a challenging month! The first truly challenging and divergent month for the Paper Portfolio in a while. While I have been anticipating a period of underperformance since at least August of last year given the strength of the Paper Portfolio over the past 12-16 months (I just didn’t know when), the timing did … Continue reading Paper Portfolio – April 2021 Update
Hello, friends. 👋🏻👋🏻 Before I dive in, just wanted to remind everyone that I originally started the Paper Portfolio only to be a writing device. I wanted something that would force me to write more frequently. This is not intended to be investment advice. I am not a registered investment advisor. I am not qualified … Continue reading Paper Portfolio – March 2021 Update
Truth be told – I did not realize January was about to end until the parking lot admin showed up yesterday with my February parking pass. I am usually quite good at keeping track of time…which made the situation all the more surprising. But there is nothing like a continued firehose of news flow to … Continue reading Paper Portfolio – February 2021 Update
Happy New Year – May we live in less interesting times in 2021! What a year. Although 2020 could have been a lot better in many ways, especially when it comes to offline social interactions, capital markets were definitely much better than anticipated. Not only did the deepest and sharpest recession in 100 years not … Continue reading Paper Portfolio – January 2021 Update
Entering the month, the Paper Portfolio maintained a defensive posture given election uncertainties. We began to take this defensive posture starting late in the summer, which allowed us to escape the volatility of August, September, and October largely intact. When we chose to further maintain our defensive positioning during the last update, Capital Flywheels argued … Continue reading Paper Portfolio – December 2020 Update
The Paper Portfolio’s continued defensive positioning during October turned out to be an appropriate move. The Paper Portfolio returned 1.36% vs -2.65% for the S&P500, despite being skewed towards well-owned names. This brings year-to-date returns to 74.38% vs 2.64% for the S&P500. The initial shift into a defensive position at the end of August helped … Continue reading Paper Portfolio – November 2020 Update
Much like the general market, the Paper Portfolio had a volatile September. However, the Paper Portfolio proved to be much more resilient than the market overall. The Paper Portfolio was approximately flat during September, returning -0.34%. In contrast, the S&P500 returned -3.74%. This brings year-to-date performance up to 72.04% for the Paper Portfolio and 5.58% … Continue reading Paper Portfolio – October 2020 Update
Similar to July, August was another choppy month. Although the Paper Portfolio did close the month well, it did so with materially more volatility than the index. The underlying reasons for the volatility remain the same as in the prior month. The Paper Portfolio is exposed largely to secular growth stories, many of which benefited … Continue reading Paper Portfolio – September 2020 Update
Like June, July was a fairly volatile month with investors trying to decide which way to go. The Fed’s continued loose monetary policy supports value reflation trades, but economic growth remains weak with elevated unemployment. Weak economic growth tends to support secular growth stocks (more certainty) and companies with strong balance sheets (more defensive / … Continue reading Paper Portfolio – August 2020 Update
The Paper Portfolio did very well in June. Initially, the Paper Portfolio lagged the index early in the month as investors furiously bought stocks related to economic reopening (including a number of very questionable bankrupt companies like Hertz)…the Paper Portfolio, unfortunately, has limited exposure to that theme. But, fortunately, our timely addition of Boeing allowed … Continue reading Paper Portfolio – July 2020 Update
While COVID-19 remains very much with us (unless you happen to live in the few lucky places that have decisive control over the virus such as China / Hong Kong / Taiwan, Singapore, Japan, Korea), May was a key turning point across the world. Many countries / states / cities took steps to reopen even … Continue reading Paper Portfolio – June 2020 Update
April was a very strong month. April almost effectively reversed the pain felt during March. While many investors likely have been surprised by the magnitude and pace of recovery (the S&P is now less than 15% below the peak in February whereas it was >30% below the peak just a little over a month ago!) … Continue reading Paper Portfolio – May 2020 Update
March was a strange month. Saying “the world changed” almost seems like an understatement. Yet, the crazy thing is when Capital Flywheels reviewed the March 2020 Update in preparation for the current update, it’s clear that the world was already changing a month ago in hindsight but Capital Flywheels failed to fully grasp the enormity … Continue reading Paper Portfolio – April 2020 Update
During February, the Paper Portfolio experienced volatile performance as global equity markets reacted to the pandemic potential of COVID-19. The portfolio ended the month down 1.32%, reversing the strong gains delivered in the first two weeks of February. While the reversal was disappointing, the Paper Portfolio continues to perform very well relatively and is well-positioned … Continue reading Paper Portfolio – March 2020 Update
The paper portfolio is off to a strong start in 2020. During the month of January, the paper portfolio returned 4.18% vs -0.04% for the S&P500. January was the strongest relative month since the inception of this portfolio. While the index was also off to a strong start in the first two weeks of the … Continue reading Paper Portfolio – February 2020 Update
Happy New Year! During December, the paper portfolio continued to outperform the S&P500 by 0.99%. Similar to previous months, the performance of the underlying stocks continue to be dragged by the significant allocation to cash (~28% at the beginning of the month). Excluding cash, the stock-only portion of the portfolio outperformed the S&P500 by 2.23%. … Continue reading Paper Portfolio – January Update
During November, the paper portfolio outperformed the S&P500 by 0.92%. This number, however, masks the underlying strength of the portfolio since ~40% of the value is still allocated to cash. The stock-only portion of the portfolio outperformed the S&P500 by 3.89% with significant strength across almost all holdings except for Uber, Match, and Activision Blizzard. … Continue reading Paper Portfolio – December Update
During October, the paper portfolio continued to show some divergence vs the S&P500, underperforming by 1.35%. While a number of the stocks recovered some of the losses experienced during September, several other stocks continued to experience weakness. Nonetheless, each of the underlying businesses remain strong. This portfolio should be well positioned to outperform sometime in … Continue reading Paper Portfolio – November Update
Over the past month, there has been no shortage of news (or volatility). The paper portfolio performed quite poorly despite having more than half of the portfolio in cash (-3.49% vs +1.87% for S&P500). September saw significant drawdowns on growth- and momentum-type investments. While the paper portfolio is composed of high quality names, there is … Continue reading Paper Portfolio – October Update
A month ago, I launched a paper portfolio mainly as a tool to encourage more frequent writing as well as to highlight some of the businesses I think worth discussing. Although the portfolio held 60% cash, it managed to outperform the S&P500 Index – a very welcome surprise. A quick review suggests the large cash … Continue reading Paper Portfolio – September Update
Starting this month I am publishing a paper portfolio that I expect to update at the start of each month. I am unlikely to update intra-month unless an unusual opportunity presents itself. The main goal of the paper portfolio is to act as an incentive to write more often (of course at least once a … Continue reading Paper Portfolio – August Update