MSA Capital 2021 annual letter (Sytem1, ABF)
Interesting 2021 Letter from a fund I didn’t know: Curreen Capital
2021 Shareholder letter from newly founded REQ Capital (Constellation Software)
Fundsmith 2021 letter to shareholders (Unilever)
Lou Simpson, the legendary CIO of GEICO passed away last week
A great in-depth look into the Beanie Baby Bubble in the late 90s
Joachim Klement with interesting stats on National differences in productivity
Interesting long read about Matt Mullenweg who wants to create the “Berkshire of the Internet”.
Deep dive into soon to be listed PE stalwart TPG from Marc Rubinstein
Some insights into what you actually get when you buy an NFT (hint: It’s not even the pixels…)
Great Morgan Housel post on the power of stories and irrational actors
A good reminder from Morningstar, how awful SPAC deals are for “non-promoters”…
After a few decades of deflation, Japan looks cheap from a currency perspective
The Alpha Vulture blogs celebrates 10 years and an incredible track record of 30% p.a.
2021 overview
2021 was a (for me) surprisingly strong year for equity markets with double digit growth across many equity markets.
In 2021, the Value & Opportunity portfolio gained +22,5% (including dividends, no taxes) against +18,5% for the Benchmark (Eurostoxx50(25%), Eurostoxx small 200 (25%), DAX (30%), MDAX (20%), all performance indices including Dividends).
Links to previous Performance reviews can be found on the Performance Page of the blog. Some other funds that I follow have performed as follows in 2020:
Partners Fund TGV: +38,2% (30.12.)
Profitlich/Schmidlin: +20,0% (30.12.)
Squad European Convictions (30.12.) +25,0%
Ennismore European Smaller Cos (30.12.) +23,1% (in EUR)
Frankfurter Aktienfonds für Stiftungen (30.12.) +17,3%
Greiff Special Situation (30.12.) +5,5,%
Squad Aguja Special Situation (30.12.) +5,4%
Paladin One (30.12.) +14,6%
Following an annual tradition once a year I’ll try to review my current portfolio by writing short summaries/update for each individual position. Unfortunately, I didn’t manage to do this before year end in 2021, but better late than never.
This year, 17 of the 27 companies from last year are still in the portfolio and I have 11 new positions which again looks like quite high turnover. Again, part of that high turnover is driven by “killing” the travel basket and creating a new “Energy Transition /Electrification” basket.
Overall, the number of positions is on the upper end of my preferred range of 20-30 titles. So any new investments will need to be financed through a sale of existing positions.
The summaries of the previous years can be found here:
My 21 (+6) Investments for 2021
My 20 investments for 2020
My 22(+1) Investments for 2019
My 21 investments for 2018
My 27 investments for 2017
My 27 investments for 2016
My 28 investments for 2015
My 24 investments for 2014
My 22 investments for 2013
1. TFF Group (6,0%)
Always worth a read: Saxobank’s ten outrageous 2022 predictions
Eddy Elfebein’s 2022 buy list is out
Interesting Tweetstorm from Vitalik Buterin on many aspects of Crypto
Highly recommended: An interesting and comprehensive 2021 review from Searching4value
A collection of 21 things that got better in 2021
Maynard Peyton’s 2021 review is worth reading (UK small cap focus)
Clark Street Value had an impressive 2021
Introduction: Why looking at Crypto at all ?
I had written first about Bitcoin in September 2016, when 1 Bitcoin was around 1000 USD. I always had an academic interest because the original idea and the execution of a decentralized decision making system has been a great achievement in itself. You’ll find an attempt to describe Bitcoin and Blockchain here from September 2017.
In November 2017 I made the following observation:
In my opinion, the current Cryptocraze is much more like the South Sea bubble than the Tulip mania.
Underlying the current Crypto currency mania in my opinion is a fundamental new way how to raise capital for and create a new type of decentralized organization.
Clearly the then prominent ICOs were mostly complete garbage or outright theft, such as Wysker or the Naga Coin.
However, four years later, Crypto is booming again and the big currencies are more “valuable” than ever before and there is a “Cambrian explosion” of activity all over the Crypto space.
So I decided to have another look at the Crpyto mainly to educate myself on new Crypto currencies but also on “second generation” activities such as Staking, DAOs, DeFi and NFTs.
Maybe it is of interest to some readers, maybe not, but I do think it makes sense to understand a little bit the evolution in this space. Just to be clear: I don’t think that the space is “investable” as such, however part of the infrastructure that is created now might have impacts on other parts of the economy and society.
So let’s kick it off with looking at the main 20+ Crypto currencies according to “market cap” according to coinmarketcap.com.
“It turns out that (Bill) Foley is John Malone on steroids” – self recommending
Decent write-up on TFF Group
Some book recommendations from Morgan Housel
Good deck from VEF on the Indian payment opportunity
Chinese company Shein is disrupting Fast Fashion
Recommended: Ben Evans annual presentation on future trends
A good perspective on stock buybacks from Junto
Every year on December 15th, the blog celebrates another anniversary, because on that day in December 2010, the blog went live for the first time. (Edit: This should have gone out yesterday….).
As always there will be a separate performance portfolio review in the beginning of Januray. This time, it is the 11th. I have googled around a little bit and the Number 11 seems to mean sometimes achieving a higher spiritual level. I am not sure if I managed this in my 11th year in the blog, although I feel strangely relaxed about the recent market turbulences 😉
Again, a big thank you to all readers, especially those who contribute (and motivate) via constructive comments but of course also to all the silent readers.
The top 10 posts in 2021 were the following:
Condensing the watchlist and some general remarks:
As the ultimate climax (or anticlimax), my readers will find below a table with all Swiss stocks that I identified in round 1 as worth to “watch” including a second flag if they made it into my 20 stock “priority” watch list. Those who manage to read to the very end will also find my next target country for the “All Stocks” series 😉
Overall, I prioritized companies that are already in my portfolio or have the chance to become a member of my high quality “GARP” bucket at some point in time in the future or undergo a potentially value enhancing transformation process (ABB, Metall Zug, Holcim).
I am in general very positively surprised, both on the quality of the businesses that I have seen as well as the quality of the reporting of many companies. I always thought that Switzerland is mostly about banking and tax evasion.
The best definition/explanation of Bitcoin I have read so far (Spoiler: Bitcoin is Art)
Tyler Cowen on Magnus Carlsen and the future of Chess
Highly recommended: Very insightful analysis why Casper (Online Mattresses) didn’t make it as a public company
A nice pitch for Nintendo as an investment
Nice review of “The Delusions of Crowds”, a new book by William Bernstein
Monevator on the end of P2P Lending (in the UK)
A very critical but equally fascinating interview with one of the Cofounders of the ConstitutionDAO
value and opportunity 