CoBF members 2018 returns

[Foreign Tuffett]

+7.24%

 

Things I did well:

 

- Used volatility to my advantage. In other words, I did a fairly good job of buying low and selling high. The vast majority of companies/stocks aren't long term compounders, so I think being sensitive to valuation is very important

- Used special situations (tender offers, merger arb, etc) and ex-US investments to diversify 

- My larger positions did materially better than my smaller positions

- I ran a diversified portfolio all year, which increases the odds that I actually did some things right, and wasn't just lucky

- While there were some unfortunate exceptions, I generally maintained price discipline when buying and selling instead of "chasing the tape" up and down

- To paraphrase Lord Keynes: when the facts changed, I did a fairly good job of changing my mind.

 

Things I need to improve:

 

- At times I bought before doing sufficient due diligence. This isn't mere hindsight, I knew at the time that my research was insufficient, but bought anyway out of fear of missing out and/or impatience

- I invested in low quality (tangible asset heavy, cyclical, industry in secular decline, etc) businesses without demanding a sufficient margin of safety. This year I plan to focus on higher quality businesses 

- I need to swing the bat a little harder when I see a fat pitch. I'm naturally risk adverse, so this is difficult for me to do

- I generally find nano/micro/small cap companies much easier to understand and analyze than large and mega cap companies. This year I plan on doing a better job of "staying in my lane"

- While my sample size is small, buy decisions based primarily or exclusively on quantitative criteria haven't worked very well for me. I need to focus on qualitative criteria too.

- Focus on the underlying business and ignore the noise. Focus on the underlying business and ignore the noise. Focus on the underlying business and ignore the noise.