Milestones

This past week Nasdaq took a breather (-6% from ATH). Many stocks (like TSLA) are still in bubble territory; I am fairly certain that in three years we will look at these pockets of insanity and wonder “what were we thinking?”.

In the midst of this mania, my personal portfolio temporarily hit the (psychologically important) $1M mark. This was the only explicit goal I set for myself, when I started this process; the only one that focused on outcome rather than process.

Little did I foresee the trajectory the portfolio would take. It started 2020 at $865k, touched $925k in Feb, before crashing down to $645k in mid-March. It passed the previous high in early August, and hit ATHs in early September. It has been quite the ride!

So what happens now? Honestly, I don’t know what happens to markets. I have been so wrong so many times (even just this year), that every atom in every cell of my body has embraced this ignorance.

What do I hope? As I’ve sold down some large positions (TCEHY, and JD in particular), my cash position has ballooned once again to 25%. I do hope for a pullback, that is obvious, and self-serving.

In March, I did buy some IAC, DIS, and CMCSA (and nibbled on BRK, MKL, and GOOG). But the V-shaped recovery meant that my usual strategy of using (richly valued) puts during times of emergency to back into positions was sub-optimal. I did buy shit, but not in size!

I am not sure if that was a “process” mistake, knowing what I knew then. The range of outcomes seemed quite wide. While a V-shaped recovery was possible, it did not seem like a high-probability bet.

In March, I was more pessimistic than most people. Today, I am more optimistic about COVID than most people. I really don’t think that the virus will dominate our lives in 2021, the way it did in 2020. I expect the worst hit industries to bounce back sooner than most people do. But don’t listen to me; what do I know.

In recent weeks, I bought some BAC and SCHW.

Buffett’s selling of WFC makes me nervous of my sizable position, but I see so much optionality – so many ways in which one or more things could finally go right – that it seems silly to bail out now.

I fully expect to regret for not paying obeisance to WEB.

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