Two 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.
Three 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.
This performance is remarkable because, for amateur investors who know what they are doing, it’s not a remarkable performance.
$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), 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 lifelong springboard to perform as-well-or-better (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 contrarian investing – what happens when you systematically attack disempowering assumptions that defeat the vast majority (such as “Stock picking is gambling and beating the market is impossible, so you need to hire a professional or, if you can’t afford one, peasant, at least diversify” 💩💩💩💩).
This is the world’s greatest hobby, the peak of intelligent laziness, the art of investing in addiction, where you front-load the work, then position yourself to out-earn your job – and probably your boss (and definitely most day-traders) – by doing mostly nothing.
This is doable. This is duplicatable. This is scalable (or slim-able: this system 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 & lived by me since 2006: “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 solve your most omnipresent problems (including “I work because I have to, not because I want to, and I’m scared I will outlive my money”).
This can be used to escape – or avoid – a dangerous dependence on individuals & institutions that you don't like or trust.
This is meaningful – though not comprehensive – proof that a 24% return is doable for amateur investors with a long-term, hands-off strategy (and that "You can't beat an 8% return so don't even try" is 💩).
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.
“Hammerhead Snark”
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 an artful balls-out fistfight.
The median human is getting mangled by extreme greed while bamboozling themselves with extreme fear, the cavalry ain’t coming because investment competence & emotional literacy have not evolved in damn near 100 years despite our tech-based progress (as a collective we are still stuck assuming & battling about nonsense that’s been debunked & satirized since The Great Depression), and it is getting increasingly painful to give myself permission to keep my mouth shut patiently & build proof-of-concept privately.
That is why I've shared this little glimpse inside my split-test, and here are three 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 questioning conventional, under-performing assumptions like “Stock picking is gambling and beating the market is impossible, so you need to diversify as much as possible and borrow as much as you can afford” 💩💩💩💩) – could it be because they are too scared to think with informed optimism (bamboozled by fear) or because you are their recurring revenue (mangled by 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 your own split-test?
I believe that you can win here (assuming that you’re ready). But do you believe in you?
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 stand up, back up, breathe in, crouch down, get a running start, strap on a pair of gender-ambiguous balls, watch this training & let’s roll 🍣.
-Cole Hauptfuhrer, Chief Supreme Grill Sergeant, findfatfish.com
PS: If you want to read & respond to this on LinkedIn, you can do that here.