2 of my main mantras as a teacher of investing are "When in doubt, split-test” & “Do not be a hypocrite.”
So in August 2022 I created a “$100k side-bet portfolio" to split-test a concentrated-but-not-ultra-concentrated portfolio against my usual focus investing strategy.
3 years later – of doing almost nothing except holding – this portfolio has produced around a 150% return & created around $150,000 USD in unrealized gains.
I can’t show the full 3-year return because “2 Yr” is the limit – which does show how shortsightedly these tools are persuading us to look. Be aware, and beware.
Here’s what this is not:
This is not some flex or declaration that I am a gajillionaire or genius. I don't care about those things, I am not structured to become those things, and I believe that needing to seize & flaunt these "status markers" implies the presence of a micropenis.
My vast preference is to keep myself, to myself, because talking dollar figures is distractingly sensitive & deeply subjective – having a spare $100k to split-test strategies is impossible privilege to some, pathetic peanuts to others – and more importantly because Find Fat Fish is most powerful, by far, when it's the answer to the question, "What gets *them* the best result?"
This is a brief, selective showing of my cards in an attempt to elevate your perception of what’s probable, and to help future Finatics get un-stuck.
$150k is not an impossible profit and 150% over a 2- or 3-year period is not a Hall-of-Fame return (I've done better, my clients have done better, even some-friends-I've-helped-for-free have occasionally done better), and I would never share this story with you if I wasn't loaded with long-term global evidence that you can use my fact-based faith as your springboard to perform as-well-or-better long-term (if, of course, you’re ready).
Here is what this is:
This is focus investing – what happens when you step away from diversification.
This is amateur investing – what happens when you step toward self-conviction.
This is the world’s greatest hobby – the peak of intelligent laziness – where you frontload the work, then position yourself to out-earn your job (and probably out-earn your boss) by doing mostly nothing.
This is doable. This is duplicatable. This is scalable (or slim-able: these strategies could be used to multiply $100k, $100, or $100m, without much alteration necessary).
This can be used to capture your most exciting opportunities (my personal favorite, illustrated here: “How do I position months of expenses to grow into years of freedom with no realistic chance of that money dropping to zero?”)
This can be used to conquer your most excruciating & longstanding problems (these are the banes of my ideal clients: “I work because I have to, not because I want to” & “I’m scared I’ll never retire, or outlive my money”).
This is 100% consistent with what Peter Lynch predicted amateur investors could do in 1989, with what Warren Buffett guaranteed that he could do in 1997, with what I've been doing since 2006, and with what I've been helping other people do since 2010.
I've turned 19 as an investor & 15 as a teacher and – as a creator – I am starting to kind-of-hate-myself for staying silent publicly & letting bullshit flourish without a fucking fistfight. The median human is getting mangled by everyone & defended by no one – they’re getting victimized rapaciously (greed) while rapaciously victimizing themselves (fear), the cavalry ain’t coming because financial competence & emotional literacy have not evolved in damn near 100 years despite our IQ- & tech-based progress, and it is getting increasingly painful to give myself permission to keep my mouth shut humbly & build proof-of-concept quietly.
That is why I've shared this little glimpse inside my split-test, and here are two questions to consider:
If someone is telling you that you are perfectly incapable of taking an intelligent crack at investing your own money – at making your 9-to-5 unnecessary by investing as a hobby; at becoming empowered to say, "I work because I want to, not because I have to”; at questioning conventional, under-performing assumptions like “beating the market is impossible so we must hire a professional & diversify” – could it be because they are too scared to think optimistically (fear) or because you are their recurring revenue (greed)?
I've helped clients go from feeling out-of-their-depth & scared-for-their-survival to confident, swaggering, and outperforming (sometimes firing) financial advisors – based on 8 weeks of training & 2 years of followthrough. Do you have the urgency, solvency, and gender-ambiguous balls to follow their lead & start up your own split-test?
If no, consider making fewer assumptions & asking better questions, such as: “How can I double my money, or better, every three years, with no chance of that money dropping to zero?” & “How can I make my life better, in all ways, by investing my own money as a hobby?” Then back up, crouch down, breathe in, get a running start, strap on a pair of gender-ambiguous balls, watch this training & let’s roll 🍣.
-Cole