House Keeping, Lessons from 2023

I hope everyone enjoyed their Holidays as much as I did!

I wanted to update readers on some upcoming changes to the newsletter. First, a big thanks for reading! I enjoy writing this and hope you find some fun and value in reading. I’ve been writing steadily for almost two years now. It has been a great experience, and I hope to make it better in the future. This brings me to my second point: I will turn off paid subscriptions. Given the timing of when I started writing, this will probably happen sometime in late April or May. I appreciate the support that my handful of paid subscribers have provided (thanks, Mom!), but I find that it increases my stress for publishing. Even though I only have a handful of subscribers, I feel I should publish regularly since people are paying to hear from me. That’s just not where my life and mind are right now. Typically, what happens is I get some ideas, sit and write for a day or couple of days, and then have several articles in the queue to hit my bi-monthly schedule. I enjoy the stream of consciousness of writing, and rather than feel forced to publish on any particular schedule; I’d rather publish when the thoughts come. That doesn’t feel like the most user-friendly paid service description, so I’ve decided to go subscription-free for a while. So that means you might hear from me more, or maybe less, but definitely irregularly! If I decide to revisit the situation, I will let you know.

Lessons Learned 2023

I’m not much for New Year’s Resolutions. I like to think that if I find something that needs addressing, I go ahead and do it (narrator: he usually ignores it). I don’t need to tie it to the calendar. Finance is a strange exception for me. Usually, everyone associated with investing and the financial markets do one of two things this time of year: 1) Recap their last year or 2) Prognositicates on the upcoming year. I am forced to think about my year just because everyone else is talking about it!

My year was good. Not great. Not terrible. In some ways, I was still recovering from 2022, a terrible year for me. It just so happens that I was listening to this fantastic Planet Microcap podcast featuring Paul Andreola, Jason Hirschman, and Maj Soueidan, hosted by Robert Kraft. They mentioned the fact that a year couldn’t be evaluated so much by its returns but rather by the quality of the process and decisions. Returns are just a byproduct of your process. That sounded good to me, so I looked through my year with that mindset. Here are two lessons I learned that I will share so that you can learn from my mistakes:

Fewer Unforced Errors:

Like I said, 2022 was painful. Coming into 2023, I determined that I needed to commit fewer unforced errors. I define these as errors that I should have seen coming - all the data and signs were there - but I missed or ignored them. In my simple test, if I say, “What was I thinking?” down the road, then it’s probably an unforced error. I had several in 2022 and was determined to make fewer in 2023. On this front, I had mixed success. Two major positions I owned coming into the year decreased dramatically over the year. One, I watched carefully and determined that the situation changed. I sold and avoided a 50% loss. Another surprised me. But in retrospect - “What was I thinking?” Again, I had made an error that I should have seen coming. One of the things I learned is that I need to do regular reviews of my largest positions. Try to look with fresh eyes to avoid becoming complacent.

It is OK to do Nothing

I spent much of the year confused. Recession? War! Lots of crazy headlines. Individual companies have both positive and negative surprises. Early in the year, I felt agitated much of the time. Then I realized if I didn’t know what to do, I didn’t have to do anything. I spent my time researching. Adding companies to various watch lists. Reviewing current holdings. But, very little buying and selling. And it worked pretty well. I realized that if there is nothing particularly obvious to do, then I don’t need to do anything. This is a difficult thing for me if there is lots of noise. I found it a very refreshing lesson to learn or re-learn: If there is nothing to do, then do nothing.

That’s it for now! You will hear from me again. Maybe soon, maybe later…

Doing nothing can consist of long walks in the snow…