Theoretical are fun, but here's my actual ~$15M* portfolio: - $7.5M $LMND - $4.1M $PATH - $1.4M $FOUR - $706k $HIMS - $516K $ROOT *includes some margin

A 30-year fixed mortgage is basically a long-dated call option on inflation. You borrow dollars today, lock the rate, and repay in nominal terms. If inflation explodes, your debt evaporates in real terms while your house price soars. You’re long the house, short the dollar.

I've started diving deeper into $FOUR. Thank you @jakebrowatzke for all the links and references. So far, the company seems very complex, and there are several things I don't like. The ownership structure, the founder's uncertain future, the high reliance on acquisitions (as key growth driver), the debt ratio, the way customer acquisition costs are reported (in mergers and acquisitions, they end up in "A" (amortization) instead of margin—therefore, looking at margin return and/or EBITDA isn't sufficient, in my opinion), the low R&D spending level (I want that to be relatively high in a (disruptive) technology company), the 15% dilution in 2028… I also don't see good potential for scaling and operational leverage. Mergers and acquisitions (and the resulting cross-selling and some synergies) can't be the only growth path… They have quite some respectable competitors - which look much “cleaner” and “simpler” to me (simplicity is an advantage imo). And apparently, they aren't leveraging the most important disruptive technologies for the financial industry—AI and cryptocurrencies. On the positive side… I like the industry/market segment – ​​it's ripe for disruption and growth. I really like the founder, the strong market position in the specialized areas, the growth potential (if it continues), and the cross-selling opportunities created by the mergers and acquisitions. … And I respect your enthusiasm and conviction, @jakebrowatzke – given your success track record. The bottom line is, I still need to delve into this much more deeply. The company isn't clear-cut – I'm more confused than convinced. This could prove to be an opportunity… if they're misjudged (you shouldn't judge a book by its cover)… once the market finds out…

And we’re eternally grateful that you teach and give info for free. It really is such a blessing.

Despite the volatility, this is a year I can 10x my portfolio. However, in order to achieve this goal, I had to make many psychologically difficult decisions yesterday, which is why I didn't post much. I have one key performance indicator for my portfolio: average time-weighted annualized returns. Over the past six years since I started investing in 2019, I have averaged over 200% returns per year. Yes, I've had down years (the COVID crash and the 2021-22 sell off), but then I've had other years like this one to create this average—all without any use of options, only the purchase of common stocks. How is this possible, you ask? Might I just be very lucky? At the beginning, perhaps. But there is a way that these returns are achieved. It's not complex, but it's also not easy to do. You must always only own 2-5 companies that, from today, have the highest expected annualized five-year returns—not from yesterday's numbers. Give a limited amount of leeway for momentum and psychology, relying almost entirely on today's valuation and expected free cash flow growth over the next five and ten years, as calculated from this present moment. Tying one's identity too closely to a company can stop you from owning even more of it in the future, by growing your portfolio faster than the company is able to reasonably grow its market cap for a period of time. As Peter Lynch says, a stock doesn't know that you own it—though I suppose in my case, this is not entirely true. At the same time, it is vitally important not to overtrade on small discrepancies, but only on a major change in valuation or fundamental thesis. The math should be abundantly clear. The thesis without holes. Emotions alone, like greed and fear, are what should make decisions psychologically hard. The math should be easy. These emotions should not be ignored; they should be used as a hint as to what everyone else is feeling, to make it easy to know when one's moves are contrarian to those of the crowd. Remember, it is not an investor's job to try and predict the short-term future. Recessions and sell-offs can generally not be known beforehand with any level of certainty, and trying to predict them is only harmful. Our job as investors is simply to make our decisions based on the biggest divergences that exist today between present valuation and present reality regarding the most likely amount of free cash flow a business will spit out over the next five and ten years. Before someone gives me another one of Peter Lynch's timeless quotes—that selling one's winners to buy one's losers is like cutting the flowers and watering the weeds—you must remember that Peter Lynch was someone who sometimes had over a thousand stocks in his portfolio. This was his greatest weakness. How he picked stocks, how he valued them, how he read balance sheets and income statements: all of that was spot-on perfect. He taught me how to know if a company is undervalued today. But owning a thousand stocks? There's no way this can be done without owning many weeds. With my strategy, I never have any weeds to water. When a piece of evidence proves a thesis incorrect and I find out one of my stocks is a weed, it is instantly rooted out to water my flowers. Easy, when I can only ever own my best 2-5 ideas. But doesn't this strategy mean that I sometimes miss out on winners? All the time. But why should that bother me? I'm annualizing my portfolio's growth at over 200% a year owning only my best ideas. Not every opportunity needs to be captured for me to generate a track record that proves everything traditional finance teaches about investing in a hyper-diversified way is hogwash. Yesterday, I moved my portfolio more heavily into $PATH and $FOUR, reduced total holdings 😢 & total margin exposure. As always, I do not believe I can predict short-term price movements, and that is not my goal. Over the next few years, I think we'll learn that in 2025: the AI bull market was just getting started 🚀

VERY CONERNING: 🇪🇺 The EU just banned cash payments over €10,000 and will require ID for every Bitcoin transaction starting 2027. They're criminalizing privacy.

One underappreciated aspect of Shift4 Payments $FOUR is its status as one of the earliest investors in SpaceX, stemming from CEO Jared Isaacman's longstanding friendship with Elon Musk. Depending on the exact price paid for the stock, around 3 to 4 percent of your investment dollars are effectively purchasing SpaceX shares. The $1 billion share buyback program announced by Shift4 in its latest earnings call will boost that percentage even further by retiring approximately 15 percent of $FOUR's outstanding shares. This implies that even a stagnant $FOUR—a highly unlikely scenario given the company's 19 percent organic growth and 61 percent overall growth year-over-year including acquisitions—could still see its stock price rise by 40 percent if SpaceX's valuation increases tenfold.

"Three wonderful businesses is more than you need in this life to do very well". - Warren Buffett I now own ~0.1% of $LMND ~0.08% of $PATH ~0.04% of $FOUR Not many years left that I need to keep compounding at 200% anualized to eventually own 10% of $LMND