Investor Cornerstone Portfolio Approach

I have always been a long-term focused investor, from my very first trade on E-trade in 1998 to today’s portfolio under management.

After 2018 and six years of successful portfolio management, I decided to entirely weight my holdings much more towards aggressive growth companies. At the same time FAANG-M (Facebook, or Meta, Apple, Amazon, Netflix, Alphabet, and Microsoft), FANGMAT (including Tesla), and FANGMAT-N (including Nvidia) were becoming increasingly popular and well-known based on their much greater outperformance against many indices, ETFs, ETNs, and mutual funds.

During 2022, I refined this aggressive growth portfolio further to develop a similar lesser number of holdings as with FAANG-M, FANGMAT, or FANGMAT-N. The core holdings of the portfolio are COPR (Coinbase, Opendoor, Palantir, and Rivian). I also occasionally trade companies with strong upside potential over the short-term, especially companies focused on farming/agriculture and supply chain/logistics. In addition to COPR, I own ZIM Integrated Shipping Services.

I have always strived to holding fewer companies over the long-term and the ability to be where I am today is built upon some core investment principles:

1. Capital allocation; namely, organizing a consistent plan to have ample capital coming into the portfolio.

2. Screening tools; first to reduce diversity, equity, and inclusion or DEI risks, and second, to utilize financial models that provide an estimate of the next five-year investment return.

3. Management strategy; the simple goal is long-term performance that exceeds 90-percent or greater of investment options, with a minimum threshold at the 75-percent level. Thousands of investment options are compared annually. I take a defensive position to accumulate and build positions further rather than trading and build long-term short positions occasionally.

Within the U.S., there are just under 7,000 publicly traded companies to invest in. As an aggressive growth investor my goal is to generate annualized returns of 30 percent or greater. How can this be done? By finding the next big opportunities over time.

Based on the universe of investment choices, there are a variety of potential companies that are options for the portfolio. The challenge is identifying companies with the greatest potential to take substantial market share in the future, and/or find smaller companies that are highly cyclical, but still can grow robustly within their industries.

If we consider who has thrived and gained substantial market share, we must consider the current titans or FANGMAT-N. Many of these companies are entrenched within trillion-dollar and even multi-trillion-dollar markets. While many Wallstreet companies that go public promise great return opportunities, most are highly overvalued and never meet those lofty expectations. Touting a $50 billion addressable market opportunity when Company A is only doing $300 million in revenue sounds great, but for that company to replicate an Amazon-like return, they will need to take half or more of the entire market, which if anyone really thinks about it, isn’t going to happen.

This approach supports the fundamental framework and logic behind COPR as all these companies are focused on massive market penetration opportunities, while also allowing for additions like ZIM where substantial investment returns can still be made.