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43.16% Return YTD And Tons Of Mistakes

Nikolai Galozi profile picture
Nikolai Galozi
1.78K Followers

Summary

  • In 2021, I outperformed the market by 20.03% with 10-15 concentrated positions.
  • However, the performance could have been much better if I would have avoided some mistakes.
  • The Chinese Tech stock selloff hit my portfolio the hardest.
  • The following article contains a reflection on my investment decisions in 2021 and a short outlook for 2022.

Planen Sie führende Strategie der erfolgreichen Geschäftskonzept Wettbewerb führend, Hand der Spieler Schach Brettspiel setzen weiße Bauern, Textfreiraum für Ihren text

marchmeena29/iStock via Getty Images

It's a Wrap!

2021 has ended, and for my investments, it has been a good year. From January 01 to December 31 my portfolio appreciated by 43.16%. Meanwhile, the NASDAQ (NDX) returned 26.63%, the S&P 500 (

This article was written by

Nikolai Galozi profile picture
1.78K Followers
Tax & Audit Consultant from Germany with interests in philosophy and finance.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of ZIM, BTC-USD, GSL, TCEHY, OGZPY, BABA, POYYF, SRUUF, DAC, BIDU either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I have a beneficial long position in the shares of Kazatomprom (LSE:KAP).

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (74)

vantuckman profile picture
Also, long DAC, ZIM, and GSL, among others. I agree that the bottle necks (and thus rates rising as a result) will continue longer than our leaders will have us believe. Yes, the industry is cyclical, and yes, some day the uptrend will stabilize. So...it's not "different this time." It is absolutely (IMHO) going to be longer than it has been in the past. Meanwhile, the companies above are responsibly reacting to this market-driven bonanza. AND they are sharing the profits with shareholders (I think DAC will be more generous in the future). The conditions that exist (and prices) can only be remedied by decreasing demand.
A black swan event could do that, but I don't see the politicians being able to quell demand. I see this as an at least lasting 2 more years--or more. (Subject to changing conditions of course). To your opinion--and positions--I say "right on!" Cheers, Kirk
Nikolai Galozi profile picture
@vantuckman
Thanks for reading. I certainly hope for DAC to be more generous in the future, but I'm not sure about that. They will increase their dividend by a lot. But after listening to the earnings call I believe they try to withhold a lot from their shareholders. That's why I shifted towards GSL. However, if you are right, the DAC position appreciates more.
vantuckman profile picture
Re: GME. Your comment:
"The exit wasn't calculable" is so spot on! Thanks for that--and the article!
And emotions taking over; of course they did! I am so tax-averse that it was a real battle (between me and myself) because all along I agreed that the high SI was unwarranted--even for a "dying" business. (A debate for another time perhaps). And...while I knew a squeeze was possible, my thesis was that the business, with net cash equal to share price, and no danger of BK, was viable for enough time to attain intrinsic value (I thought 40/share at the time). So, I was in long-term--which turned out to be short-term because it got so crazy. In short, even in hindsight, when would somebody have sold? Crazy stuff. But the lesson I took from it was that some folks thought GME would crater, and continued to short a stock that shouldn't have been shorted at a certain point. In other words, theshorts thought they were smarter than Mr. Market. Eventually, the market will win. Arrogance is a killer. Regards, Kirk
Nikolai Galozi profile picture
@vantuckman True words! Thank you.
L
Being so invested in crypto definitely reduces your credibility.
Hugo Stiglitz profile picture
thanks for the well written and refreshingly honest self-assessment, it was a pleasure to read.

Have you considered PROSUS, as an even wider tech bet than tencent?

Don't you think that a new government in Kazakhstan may make Kazatomprom too risky?
Dinjax profile picture
@RDSMI PROSY seems to be one of those stocks that always has a good story and is undervalued but is never appreciated by the market. Was in it for over a year and fortunately bailed without losing too much. For some reason the market doesn't appreciate it, possibly due to its convoluted structure with NSPNY.
Nikolai Galozi profile picture
@RDSMI
I think the same as @Dinjax. Prosus is widely known, and the market believes the discount is fair. I don't see that changing any time soon.

The recent protests/attacks on the government have been surprising to me. I have to confess I didn't see that coming. I think nobody knows how this state of emergency will develop in the future. However, Kazakhstan has good connections with Russia and China. I don't think they will allow the state to take meaningful damage. I didn't trim my Kazatomprom position.
r
Take a look at GURE, bromine producer
Nikolai Galozi profile picture
@rliggitt1 I'll take a look. Thanks!
Dinjax profile picture
@Nikolai Galozi thanks for this great article. It's given me some ideas to pursue.

I had been looking at ZIM, and will add GSL to the list. As you said, bulk shippers have dropped since Oct., but it seems like it may have gone too far. Any thoughts about SBLK and GOGL?

I'm with you on OGZPY, have LUKOY and have also been riding the US NG wave with AR and AM. You also might want to check out PBR as well as their preferred shares PBR.A.
Nikolai Galozi profile picture
@Dinjax Thanks for reading! I really like GSL / DAC for their safe cashflows into 2023+

For bulkers: I bought SBLK in 2021 at the wrong time and burned myself. Bulkers are heavily dependent on the Chinese property market. The Orderbook looks great, however. I believe Containers are the better investment as of now.

Thanks for your suggestions!
k
Wow Nikolai, I have been following you for 3-4 months and this is a very good an honest article. Probably the best one! Congrats for your performance and ideas! An overperformance of +20% against the market is amazing and not feasible for everyone!

I am long at some of your positions: Gazprom (the main one in my case), BABA, Baidu and Lukoil, that you are also mention.

Like you, I commited the same mistake with Chinese shares; but their long term proposition has not changed (unless the CCP tightens the knot). China is present and future. In 5-10 years we will see a different geopolitical map. And Asia will be stronger.

I am also with cryptos, but with a much smaller position (3% of my portfolio instead of your 20%). You are a brave guy with out of the box ideas. I wish you good luck and the same (or similar) results for this 2022.

Take a look at Nilsy and Sberbank; they are also good value propositions. I will take a look at your tankers too. Regards
Nikolai Galozi profile picture
@kiriak I hope you enjoy reading my articles! I Added Nilsy and Sberbank to my idea list. Will take a look at them. Thank you for your kind comment!
G
Excellent ! - Thoughts on PLBY
blessed.are.the.brave profile picture
Happy New Year! I appreciate your honesty as it shows your integrity. Long $BTI $GOGL, CCJ, $BABA (not by choice), $FSK, $GSBD, $NRZ, $RA, $ENB, $ENS (tsx)
Nikolai Galozi profile picture
@blessed.are.the.brave Thanks for your comment! How are you long $BABA, but not by choice?
blessed.are.the.brave profile picture
@Nikolai Galozi bought high, severely underwater now
t
Great article. Really good analysis and justification for your investment strategy. It definitely got me thinking about taking a closer look at the global container shipping industry. Unfortunately, I’m not quite as brave as you are when it comes to investing in places like Russia, so those ideas are a hard pass for me. I’m already quite nervous about the few Chinese ADRs I hold in the EV sector. Anyway, thanks for sharing - I’m looking forward to your future articles.
Nikolai Galozi profile picture
@thomasprj
Thanks for your kind words! I believe many overlook the container shipping sector as a 'transitory' phenomenon. However, the previous decade-long bear market was the perfect setup for insane profitability during the next couple of years.
L
Terrific article. I don't know how I missed you on SA.
Nikolai Galozi profile picture
@LEE64 Thanks!
Benedetto59 profile picture
Wow. You have impeccable entry timing. And most of your exit's are right up there before a sell off. Amazing.
Nikolai Galozi profile picture
@Benedetto59 Well, maybe I got lucky during 2021. Thanks for your compliment, but I don't believe timing is my strength.
Greenhorn Investor profile picture
Thanks for sharing @Nikolai Galozi
Nikolai Galozi profile picture
@Greenhorn Investor Thank you for reading!
U
Lots of interesting macro thoughts, relatively daring portfolio honestly reported with great results, clear writing without excessive technicalities -- overall excellent article. Thank you!
d
Nice year! You beat me by 5%. In retrospect it took effort and discipline but also a fair amount of luck. Gazprom doubling my investment helped me as well.
Best of luck on a continued run through 2022. Your portfolio is daring I will say that. And the last financial advisor that tried to sell me told me “there is no risk profile to describe your investing” and I think I’m pretty conservative.
Gonna have to follow you, you think outside the box.
Nikolai Galozi profile picture
@dynx
The last financial advisor probably underperformed the markets every year ;) Thanks for your great comment!
s
Excellent article - and year for you. Thanks for sharing your ups and downs. Quite insightful. Congratulations!
sjfaris profile picture
While your plan is good for growth is does not fit for people who need income.
d
@sjfaris while it looks to entail a lot of risk, so I agree it is NOT for everyone income needs aren’t the issue. 40% returns fill pretty much anyone’s income needs.
B
@sjfaris read another article then. It’s his money. He needs to do what he thinks best for his own money
D
Great Article Nikolai!
100% with you on China, BTC and some of the value plays. US Big tech is absolutely suicidal at this point, although META may be a rare exception?
I really like your plays on uranium, will look into that as well.
What do you think of American fossil fuel companies like EPD? Might be good to balance out the riskier Russian bets...
Don't really get what you see in ETH, but I noticed you wrote a whole article about it, will look at that next...
Glückwunsch on those mouth watering returns und danke für dein geilen Beitrag!
Nikolai Galozi profile picture
@Don't follow the herd
If US tech starts a correction, Meta will fall too, even if the valuation isn't comparable to its 'peers'. Sometime in the future, the biggest ETFs have to pull back. The past 10 years were easy money for passive investors, hence the still ongoing ETF hype. I believe the next 10 years will be different.

ETH really is my only growth bet standing. It still correlates strongly with BTC and continues to outperform. I think 2022 will have some great catalysts for the Crypto asset space & especially DeFi / Web3 protocols.

Danke für deinen netten Kommentar und die Empfehlung - schau ich mir an :)
t
Enjoyed your article. It was a refreshing viewpoint and nice change from the regular SA articles. It was also easy to read for someone non technical like me. Keep up the good work!
Nikolai Galozi profile picture
@toddieb70 Will do so! Thank you.
T
Good article. Refreshing to hear someone talk about their successes AND mistakes. I also liked the fact you explained the thought patterns that drove your decisions whether right or wrong.
Nikolai Galozi profile picture
@Terry Rettig Thanks for the great feedback!
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