Mea culpa: I know tweeting an exceptional (but entirely undocumented!) annual return figure on Jan-1st is now de rigueur for FinTwit, but I’ll stick to my usual approach, so apologies again for being a bit late with my 2024 annual review. But hey, hopefully some of you were still anticipating it…and this far from the madding crowd, it now proves a more leisurely (& useful) read! And while we’re at it, I should of course apologise for still being on WordPress, not Substack. For still plugging away doing this 13+ years later. For still having no paywall/€XXX annual subscription (I mean, what’s his bloody game?!). For still disclosing actual portfolio changes, essentially on a real-time basis, and providing a fully documented/auditable performance track record & position sizes – yup, NO look-back buys/sells, after-hours trades, and/or undisclosed hedges here! – one of the very few, if not the only (free) investment blog left on the planet (still) doing this. Whoops…and for still calling it an investment blog, for God’s sake!? And most of all, for still having no blue checkmark on X…

I know, maybe I should be thinking about changing all that…after all, it’s human nature for people to value what they actually pay for, versus what they get for free, regardless of the actual quality, quantity, and/or value involved. And constantly being demoted by the X algorithm (duhhh, no checkmark & useful third-party links in most of my tweets!) is no fun either. On the other hand, I don’t need the money, and I don’t fancy a new ‘boss’. And call me old-fashioned, or just plain old difficult, but I love having genuine skin-in-the-game with a stock, its management & fellow investors – it’s the ultimate alignment with readers & followers who actually research & buy the same stocks I own – and the unavoidable reality with any paywall/subscription is that you quickly exhaust your major portfolio holdings & end up recommending stocks in which you’re barely invested, or don’t even own at all! I guess embracing that path (& its rewards) is the name of the game, and arguably it’s perfectly fine if your customers receive fair warning…but for me, the ‘compensation’ I value from the blog is knowing fellow investors have (ideally) multi-bagged with me, and at worst feel the same pain & hopefully lose less money than I do on some (inevitable) losers.

[To be fair: In my first (Wexboy) decade, my win ratio was actually 70%, which I concluded was (perversely) too high…ie I needed to re-train my attitude to risk & force myself to start adding more smaller/riskier holdings, which would presumably decrease my win ratio, but also (I suspect) increase my long-term returns overall.]

But time to crack on here – my FY-2024 Benchmark Return is still a simple average of the four main indices that best represent my portfolio, and it produced a benchmark +11.6% gain:

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Well, 2023 obviously proved (once again) that nobody knows anything, so let’s skip the waffle & jump right in – my FY-2023 Benchmark Return is still a simple average of the four main indices that best represent my portfolio, which produced a benchmark +16.0% gain:

The respective index rankings for the year were actually pretty typical. The S&P 500 was the clear winner, obviously driven by the Magnificent Seven & a general recovery in technology stocks (from a bear market that stretched as far back as early-2021), as confirmed by a spectacular +44% gain in the Nasdaq. Both the ISEQ & the STOXX Euro 600 were led by the US, with the former enjoying a particularly excellent return, actually benefiting (perversely) from large-cap revaluations as they prepared to delist from the Irish market. Of course, the FTSE 100 was the perennial under-performer, while UK smaller companies didn’t look any better on average, with the FTSE 250 scraping out a +4.4% gain while the AIM All-Share somehow managed a further (8.2)% decline. [The Russell 2000 also under-performed, but still posted a very nice +15% gain in absolute terms]. Otherwise, going out the risk curve, the MSCI Emerging Markets USD Index enjoyed a +9.8% return, the MSCI Frontier Markets USD Index was up +11.6%, while crypto blew the lights with a +108% gain in total market cap (driven primarily by a +156% gain in Bitcoin).

Of course, the backdrop to all of this was the unexpected revival of a Goldilocks scenario for the US economy/market. The inevitable recession (for generally undefined reasons?!), as predicted by 9 out of 10 economists, never arrived…first they delayed it, and now even the economists seem to be giving up on it (it’s an election year, after all). Instead, we have robust US growth & full employment, while inflation spiked right down again to a reasonable 3.4%, and the market eagerly started anticipating Fed cuts in 2024. Which can all be summed up by the 10 Year UST round-tripping to end the year down a single basis point at 3.87%! Regardless, Biden continues to spend like a drunken sailor, still running $2-$3 trillion budget deficits, with the US national debt now surpassing $34 trillion. [Just to be non-partisan, both parties are fiscally incompetent today & both share the blame for the debt with only two Presidents running an actual (rounding error) budget surplus in the last century!] 

But like I said, nobody knows anything…you really are better off ignoring macro 99% of the time, and devoting 99% of your time instead to your portfolio. The only macro ‘conspiracy theory’ I want to share is to again debunk the recent/ridiculous notion that Powell is somehow an inflation-busting incarnation of Volcker. I don’t think that’s true at all, I think he’s Biden’s whipping boy. Yes, the aggressive Fed hikes were obviously necessary to suppress the increasingly unpopular inflation spike, and to try offset some of Biden’s continued fiscal incontinence – the quid pro quo was that Biden wouldn’t question/fight higher rates – but this was also just a typical mid-cycle tactic of Presidents & politicians, and they bet on the inflation spike being a temporary post-COVID supply chain & welfare boondoggle/minimum wage hike phenomenon (& actually won the bet!).

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