Our 2021 Annual Performance

Year 2021 was great for stock investors. The S&P 500 was up 27% and our portfolio was up 31.5%.

Nevertheless, we are still lagging the S&P 500 in the long-term. See below. It is a bitter truth of our overconfidence and lack of proper investing knowledge during our initial years.

$100 invested in S&P 500 and Arrow of performance (AOP) in 2010 will be $528 and $495 simultaneously.

Here is our portfolio % change by year compared to S&P500. We have managed to beat the index 9 out of 12 years. 2011, 2013 and 2016 are our bad years.

Nike and Amazon didn’t do quite well last year. Rest of the long-term holdings did fairly well. Almost half of the gain this year was due to our courageously crazy bet in March of 2020 using margin loan. Looking back now, it looked quite obvious and bold move, but it was really a crazy one.

You might enjoy this bar chart below. See how the worst performance in year 2011 has single-handedly derailed our total performance.

The silvering is that during those initial years of under-performance, our portfolio size was nimble. And during the later bull maker, our starting portfolio was relatively large.

We try to console our-self by reminding that we started our investing journey with $200 in 2010. And the 2011 under-performance wiped-out a mere $3K, but a whopping 47% of our portfolio.

Last year, our portfolio reached a half-million milestone and this year our total investment portfolio reached a million dollar milestone. This is an incredible achievement, which is beyond our expectation.

If we ought to give credit to one thing that helped us reach here, it is the magic of compounding. In the later years, our compounded annual growth rate is 27.7%.


As usual, we made plenty of mistakes last year! In 2021, the biggest mistakes are the mistakes of omission rather than the mistakes of commission. We are thankful that our mistakes are all lost opportunities and not lost dollars.

  1. Trimmed Costco and Chipotle. They are up 35% since then. They are our long-term holdings, and therefore I should have stayed away from them. I believed they got quit expensive and trimmed some.
  2. Closed below positions.
    • Oracle
    • Starbucks
    • IMB
    • Visa
    • United Health
    • Booking Holding
    • Home Depot
    • AT&T

Out of those above, only AT&T turned out to be a good move. Rest of the stocks are up 30% from the point we sold. We have purchased them during the COVID pandamic low in March 2020. All of those were purchased on margin loan and we had to get rid of those. We had hold them long enough to make them a long-term return, so that we have to pay smaller tax rate.

The hardest decision was to sell those wonderful companies, which was bought at wonderful price. I am sure I will never get to buy those companies at that fair price as March of 2020. I didn’t want to sell, but had to because of that margin loan. (Insert a sad face)

Got Lucky On

Our investments gains are mainly due to luck and often times we shamelessly take credit for that. We stroked similar lucks last year.

  1. Sold Alibaba on January 2021. It is down 48% since then.
  2. Added more Microsoft, Meta, Amazon and Berkshire Hathaway with the cash from Alibaba Sale. Got double lucky on that one.

Speculative Bets

Our brokerage firm offered us 2.8% APR margin loan. Seeing that low rate and booming market, especially when your friends are printing money in crypto currencies, I couldn’t stop myself from using that. Here on, I will not scold kids if they can not resist ice-cream for breakfast! I know how difficult it is to control the temptation!

  1. XPENG Inc.
    • Made 50% in less than 6 months. It is up 50% since then.
  2. UPATH Inc.
    • Sold in small profit.
  3. Coupang Inc.
    • Sold in small profit.
  4. Bank of America.
    • Made 15% return in 6 months.
  5. JPMorgan Chase.
    • Made 8% return in 6 months.
  6. Wells Fargo.
    • Sold in small profit.
  7. Verizon.
    • Sold in small profit.
  8. Berkshire Hathaway.
    • Sold in small profit.
  9. Alibaba.
    • We bought back some Alibaba in December. I couldn’t stop myself after the stock fell to 130s range and lost 20% in few weeks. Sold it all for tax harvesting, which is another excuse for my stupidity.

We are striving to not have this speculative section in for next year. Or at least have it shorter. This year, we got lucky plenty of times. Next year, we may not be.

I know enough about the danger of margin loan and short term speculative bets. Oftentimes, they don’t go well. Nevertheless, for this year, please allow me to flex my muscles proudly and let me take credits for my brain power! Let me indulge in my emotions. I promise not to do that next year.

Portfolio Allocation

Our long-term holding stays the same. We are getting more concentrated to few great companies. We believe they will survive our life time. Here is the allocation detail.

One metric we track to keep our emotions in check is our total and individual holding period. We notice that it directly relates to the performance of the stock assuming it is a good business. The longer, the better. See below for the detail.

Although, we believe that our portfolio holdings are good business, they may not be selling at right price. When we notice that change, we tend to make a small correction on the portfolio allocation. See below on how their valuation are fairing currently.

We are investing for a long-term. One year or short term performance matter less for us. If we have to sacrifice a near-term under-performance for a massive long-term gain, we will happily do that.

Wish you all a happy year 2022.

Happy Investing!

Recommended Reading

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s