| Year | FFI | S&P 500 |
|---|---|---|
| 2025 | 49.08% | 16.39% |
The good results we achieved last year mask how difficult the year actually was. It was a riptide of self-doubt, pain, pressure, and fear. I made more mistakes than I would have liked and learned many important lessons.
My family moved to Zurich in 2025. Since moving, I've been asked many times what I do for a living. I've had some trouble explaining it. I'm not a day trader. I make probably three trades a year on average. I don't do crypto, which is a collectible, just like gold and art. You can't value collectibles. You can only price them. Instead, I invest in assets, specifically equities. Equities generate a cashflow, which can be valued. And since we're at it, the other two options for investment would be commodities (things that are used) and currencies (things that act merely as a medium of exchange). Both of which I do not touch.
My latest way of describing what I do is, 'I support people and companies who are overlooked.'
I support them financially by buying their equity. People ask, how is buying a company's shares on the secondary market supporting the people there? Isn't it just paying off the previous owner of the shares? Well, many companies offer compensation in stock options. Whether that option is worth $10 or $20 makes a significant difference to what an employee receives for their work. Furthermore, the secondary market supports the primary market, which is how a firm would raise funds directly if they wanted to.
Next, these companies are overlooked because they are deserving of this support, yet are somehow unrecognised, unappreciated, and undervalued. Sometimes we wonder why the payoff for a good investment is so high. The payoff is only commensurate with its impact. And the impact of a good investment is high because you're there for them when it's most needed. Consider it on a personal basis. Which friend do we value more? Is it the friend who was there for us when times were good? When we were at our best and everyone else wanted to hang out with us anyway? Or is it the friend who stood up for us when we were at our worst? When no one else believed in us and others wouldn't come close? Of course, the friend that stands up for you when everyone else walks away, the one who believes in you and sees your potential in spite of what everyone else says, is the one that makes a difference.
When Trump announced his tariffs on April 5th, I got lucky. I liquidated all my holdings just in time and gleefully held cash as I watched the market crash. 'This is my chance to take advantage of the volatility, buy the dip,' I thought. Little did I know that this thinking would be a curse I had to desperately and urgently rid myself of.
As the volatility continued over the next few weeks, I found myself constantly thinking that I could time the market. That I had somehow discovered a prescient ability to sell at just the right time before a crash, or buy just before a surge. You imbecile. This led me to make some of the dumbest mistakes I have ever made investing.
I bought Reddit when it crashed in April at around $100. At that price, the thesis was simple. Did I think Reddit could in ten years be 10% the size of Meta today? As a reluctant heavy user of Reddit myself, it didn't seem far-fetched. So I bought in, at around $100. But then, the price started falling. $98, $96, $94. As this happened, my new found prescient ability kicked in. I got that premonition again that a crash was coming. Just like on April 5th, this would be my chance to liquidate everything and buy-in at an even lower price. So I did. I liquidated my stake and waited for a crash to come. It never came. Today, one share of Reddit, Inc. goes for $210.
Looking back, I am thankful that it took me months and not years to learn this lesson. Many investors lose out on returns waiting for a crash. Getting it right timing the market once is worse than never getting it right at all.
I have learned that the only thing I know to do is buy undervalued companies and hold. I'm not a trader. It's not timing the market, but time in the market that matters. Today, Steve Balmer's net worth is 50% higher than Bill Gates. This is because he never liquidated his Microsoft holdings. He has a 4% stake in Microsoft while poor old Bill only has 1% after selling almost everything. As Charlie Munger said, 'The big money is not in the buying and the selling, but in the waiting.'
It's why the most important organ for investing is the stomach, not the brain. I have many friends whom I consider smarter than me. They did better in exams in school and went on to get coveted jobs in medicine, law, and banking. Doing their part for society. But yet I've found myself today in this uncommon and fortunate position of making a living purely by supporting people and companies who are overlooked.
Last year, I allocated a significant portion of my portfolio to Intel. I bought in at around $20. Unlike most of my investments before, this time, I shared this information with people around me. When people asked what companies I was interested in, I would say Intel. What's my biggest position? Intel. With this mini-experiment I saw how the important-stomach-organ principle can play out negatively. Out of the people I recommended Intel to, most didn't have the conviction to buy it. Those that did buy it, didn't have the stomach to hold it.
For most of the year, Intel's share price fluctuated between $19 and $24. Despite being severely undervalued, no one was interested. It seemed like no one believed in the company. Intel was priced for barely head above water subsistence for the next ten years. The company was certainly at a low point. In this time, many people I had spoken to lost money. They didn't have the stomach to hold and ended up cutting their losses after 10% or so drops. Today, one share of Intel Corporation goes for $54.
I've had many people tell me recently that they should have listened to me and bought Intel when I did. I smile, knowing inside, that actually no, they shouldn't have. Instead of making no profit, they would almost certainly have suffered loss.
I will never again share investment recommendations. Just buy the S&P 500.
Michael Burry recently remarked on the advantages of being a black box investor. These are investors who don't have to disclose their positions to the public, including individual investors. He wrote, 'no one wants a dissertation on each position.' This resonates deeply. I have enough internal conflict and self-doubt regarding each investment I make. Enough fear and pain. I don't need additional exogenous criticism, or worse, a growing endogenous urge to justify my thesis to someone who might simply be unable to see it.
In many ways, diversification is the enemy of outperformance. Fund managers see the need to diversify because they need to cover their asses. It's much easier to justify a boring large portfolio that matches market performance than a highly concentrated one that doesn't. Most of these fund managers make their money off the 2% management fee anyway, not the 20% outperformance component. It's pathetic. If I wanted a market-matching investment, I would just buy the S&P 500, which outperforms 90% of funds after fees. If you call yourself an investor, you must go with your conviction. Even if it means being concentrated. Remember how Steve Balmer ended up being worth more than Bill Gates.
If you no longer go for a gap that exists, you are no longer a racing driver. - Ayrton Senna.
2025 is also the last year that I dabble in leverage. Emotionally, the heavy toll it takes on you is unanticipated. Your judgement is clouded and hard decisions become ten times harder. By my estimation, performance-wise, I've been worse off or at best equally as well off as without it. So why bother?
Looking back, through all of this, I can only be grateful for this opportunity that I have. I began actively investing six years ago. It's been tremendously difficult and, somehow, God has seen fit to let me continue doing this. I don't know how long more this will roll. It's been a painful journey, but also rewarding. Suffering is a natural part of life and I know that the only way is through.
All I can do here is be honest about this journey. Which is why I've benchmarked my performance against the S&P 500. If I can't beat the market, why bother doing what I do? I try to learn from my mistakes and just get a little bit better each day.
I am a steward. And I hope and pray only to be a good one. Valuation is ultimately about truth-seeking. Is something worth what everyone says it's worth? It applies to more than investing, and I try to live my life by it.
I remain long on humanity.
