Quarterly Letter – Q3 2023

Estimated reading time: 5 minutes

Performance

It wasn't a stellar quarter, but that's ok. -0.32% while the S&P 500 took a loss of 3.01%. Here's the comparison table:

Since inception:

Last quarter:

September was rough, and that's what set the portfolio apart from the market.

Here's contribution by sector. The tech sector really brought us down while telecomm helped keep the damage low.

It's good to pay attention to sector contributions, but with a small portfolio it's not the end of the world to let concentration run its course.

Strategy

It's far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.

Warren Buffett

One of the hardest lessons I had to learn in my previous life was that I know almost nothing. I believed the opposite was true. Now I'm slightly less ignorant at 38, but my acceptance of ignorance has served me well these last couple of years. Acknowledging ignorance and rooting it out has been one of the best investments of my life. I urge anyone reading this to do the same.

For a brief moment I was in the fundamental value camp. I would filter all public companies by price-to-earnings and buy the cheapest. This worked out as well as you'd expect.

Any time period less than 30 years is a blink when it comes to investing, but still, the pros outweigh the cons. It's like telling someone the best and safest way to stay healthy is to eat all vegetables all the time and walk 5 miles a day. Oh, and don't ever drive anywhere, and only walk at night so you don't get skin cancer. WTF? Sure, you might tack on some more years to living, but the amount of living in the years dwindles to nothing.

In an effort to live well, invest well, and teach my kids how to do the same, I decided a long time ago to go for it. This is why I'm learning as much as I can from those who have gone before me (Like Warren and Charlie), and applying these things myself.

Portfolio management is a hell of a thing. It's a great forcing function for learning from mistakes and improving how we think.

Thinking about investing keeps bringing me back to easy-to-understand but hard-to-implement strategy of buying quality companies at a fair price and holding them for as long as they're quality companies.

Portfolio

In this next section I'll discuss specific names within the portfolio and my outlook for next quarter, so I'm reserving the rest of this section for Pro and Elite member levels. If you haven't signed up yet, you can do so here.