Secret Sauce Year In Review 🗓️
2023 Investment Performance 📈
Happy new year!
I hope you had a wonderful festive period with your loved ones. This post is a review of the performance of the Secret Sauce Portfolio in 2023.
I write about each of the companies with the intention of adding them to the portfolio, either now or at a point in the future, if the shares are available at a reasonable price.
Portfolio Performance
2023 was a straightforward year for investors who were fortunate enough to hold the NASDAQ index (44%), Nvidia (246%), Meta (184%) or Tesla (130%).
The Secret Sauce Investing portfolio returned 32% across 2023. This calendar year has largely been one of inaction. I’ve held winners, topped up indexes and sold some losers. Each business I purchase is with the intention of holding for 30 years (sometimes I get it wrong).
The top portfolio holdings are biased towards tech and companies with strong IP. I have a preference of investing in technology at the right price. During 2023, I have provided updates on both Meta and Nintendo.
With the advent of AI and on-going opportunities I feel we are still in the early stages of the tech revolution.
2023’s holdings were mostly split between equities and index funds. The Index funds held in my portfolio are a mix of the FTSE 100, S&P 500 and NASDAQ.
Undoubtedly, after such a strong performance by the Nasdaq in 2023, we will likely witness some form of pull back in the next 12-24 months.
I covered both Diageo and Disney in articles this year, both of which hit recent lows. I added both at entry level positions to the portfolio.
Having lost conviction or not carried out appropriate due diligence, I exited EBAY 0.00%↑, ZM 0.00%↑ and BABA 0.00%↑. The losses in each are highlighted below.
Why index?
I am not a full time investor. To borrow from Peter Lynch, I believe that great investment ideas are found by turning over more rocks. I do not have this luxury. I am only able to go deep on 1 or 2 great companies each month.
I would rather be invested in a mix of index funds than attempt to time the market by sitting in cash.
We are in an environment where the risk free rate is the highest it has been in two decades. Investors can be paid between 3-5% for sitting in cash. As of today, the 10-year US treasury yield is 3.84%. This is down from 4.98% in mid-October. Stocks have bounced since the rate has steadily reduced.
Howard Marks described this shift as a Sea Change. Stocks and equities will not always out-perform but as per Jeremy Siegel’s Stocks for the Long Run, they have historically out performed cash, bonds, gold and T-bills on a 30 year time horizon. For this reason I remain long equities.
Closing thoughts
I hope this article offers a brief insight into the companies I write about and add to the portfolio.
The 32% return of the portfolio was a combination of luck and timing. This is unlikely to be repeated again in the near future. I am focused on building a resilient portfolio for the next 30 years.
I look forward to researching more potential investment opportunities and sharing them with you in 2024.
Wishing you all the best for the new year.
-Sonny
Portfolio Composition (in descending order)
FTSE All Share Index, META 0.00%↑, S&P 500 Index, GOOG 0.00%↑, $NTDOY, AMZN 0.00%↑, Nasdaq 100 ETF, £GAW, ADBE 0.00%↑, £VLE, DIS 0.00%↑, DEO 0.00%↑, DG 0.00%↑, $TCEHY, £FEVR.
Collaborators
Each of the following have contributed to Secret Sauce Investing at various points across 2023 and are worth checking out in their own right.
Sonny ”the not full time investor”, killing it! Cheers mate 🎉
Happy New Year Sonny! Nicely done on the portfolio - I especially like your points on the index investing! Something I've been thinking about for a while.