We lost Neil Peart, probably the greatest drummer ever, at the beginning of 2020. Later, in october, we lost Edward Van Halen, one of the best guitarists ever.
In between, we got COVID all around the world, another plague coming from China, just like all the stuff on the shelves of Dollarama. Probably that everybody who reads this blog has lived the crazy month of march as an investor. Depending on how much money you had on hand, you lived that crisis with joy, anger, fear or indifference (although I'd be surprise to learn that some people may have stayed indifferent after a market drop of 30%).
Me, I was very happy. It was one of the best times of my life, on the investing level. I really like a good old crisis, because people become irrational and sell everything. We just have to buy the best stocks and we're almost sure to be well rewarded in the medium term. I like when everything is a no-brainer, which happens only when everybody shits in his pants. I like a big scent of shit all around me.
So, while there was a major panic, I bought some expensive stocks and they recovered quickly from the crisis. But i didn't buy Shopify or Mercadolibre (both more than tripled since their lowest point) or Tesla that was multiplied by more than 8 since it's lowest point.
But I did OK anyway.
This year, I opened a margin account, after about 12 years on the stock market. This margin is a tool for occasions to come. If the market drops a lot, I plan on using the margin aggresively. If the market is high, like these days, I'm not planning to use the margin.
I also reduced the numbers of stocks held. I decided to keep the number of stocks always between 15 and 20, no more no less. I currently hold 20 stocks. When I'll get my Topicus shares from Constellation Software, I'll have to sell one of my stocks to free some space. That's how I now work.
If I add my performance of 2020 to my performance of 2019, my portfolio got a combined performance of 51% for these two years. Not amazinly superior to the market, but great anyway, isn't it? But after such a year, and a succession of good years, I can't believe that the current valuation of the market will remain. It's just too much expensive.
Anyway, another year has passed and I just thought that I should mention that things are going great for me, on the portfolio level. I could be a little more aggressive sometimes, but you have to respect your own personality. I prefer to stay closer to "cautious" than adventuring too much on the "gambler" side. With my style, I'd be surprised if I ever beat the market by a lot. But if I beat the market by a few points more than 75% of the time, it will mean that I do a good job.
Performance of the Penetrator Portfolio in 2020: 19% (including dividend)
Performance of the S&P500 in 2020: 17% (including dividend)
P.S. This year again, please, lose any respect for the fund managers who will compare themselves against another index than the S&P500. It's the only real index. If a fund did less than 17%, it was simply not a very good performance. At best, it would be OK.