December 2020 Portfolio Update:

$SPY YTD: +15.09%
Me: +88.59%

Beating the market by 73.51%!

Top 10 Holdings (~58.5% of portfolio):
$MELI - 8%
$AMZN - 7.5%
$TTD - 7.4%
$CMG - 6.4%
$NVDA - 6%
$SHOP - 5.2%
$SE - 5%
$SQ - 5%
$CRWD - 4.9%
$DOCU - 3.1%

New (Small) Positions:

$INAQ - exciting car insurance play that I believe has a clear path to 10x potential; see my @JoinCommonstock memo for a detailed write-up

$IPOC - an exciting and innovative medical company that I also believe could provide 10x potential

Closed Positions:

None (sold some $AAPL) to raise cash for other buys

Significant Adds:

$OPEN, $LMND, $ARKG, $TDOC

For all of my holdings, see: https://share.commonstock.com/X458P1FSIcb 

As we close out the year, I have been thinking about the mistakes I made in 2020 and how I can improve on them. Here are the two biggest investing mistakes I made in 2020, and what I am doing to improve on them:

MISTAKE 1: Trying to time the market - During the downturn in March, I, like many investors, attempted to buy great companies at rock-bottom. Initially, it worked out well for me. I picked up shares up $PYPL at $86, $MA at $205, $TTD at $195, $MELI at $474, and so on.

Looking at where these companies are at now, those were incredible prices, and I anticipate they will look even more incredible in a few years. The problem was, despite making these great buys, I also made some big mistakes.

Take $MELI as an example. At the time I bought shares at $474, I recognized that it was an incredible price. However, I got greedy. Instead of just buying the full amount I wanted at $474, I tried to put in limit orders to buy it lower and lower, maybe $460, $440, and so on.

And as I learned the hard way, that didn't work out. Like so many stocks, $MELI hit its bottom, bounced, and never came back. At the time, those $15 or $30 per share may have seemed like a big deal, but in hindsight, it was a big mistake.

When I went to write this thread today, I didn't remember if I bought the shares at $490 or $410 or where exactly I bought them. Those few dollars per share that seemed so important back then didn't matter at all today.

What does matter, however, is the few hundred dollars per share that I missed out on for worrying about $15. I eventually bought more shares of $MELI . . . at $965 per share.

WHAT I AM DOING TO FIX IT: Dollar-cost averaging with limit orders can be an excellent strategy, but when you use it, you need to be comfortable with the reality that all of those limit orders may not hit.

With $MELI & other stocks I screwed up on this year, I was not comfortable with that reality. My reasoning for buying less was only that I might be able to save a few bucks when I buy more. And sure, had I waited and it did go down to $430, my returns may have been a bit better.

But the reality is that I am a long-term investor, and just a few dollars should not be cause for concern. Over time, even the few hundred dollars that $MELI cost me per share hopefully won't be a big deal, but it taught me the hard way: the market is impossible to predict.

MISTAKE 2: Buying things that I do not understand - At multiple points throughout the year, I heard about stocks on fintwit or some other platform and purchased shares due to a couple of bullish posts, before I truly understood what the companies did.

Although this worked out well for me at points - $NET is up 78% since I bought it - it worked out poorly at other times. I dumped shares of $AYX for a loss and also sold some small positions I hardly understood, like $MDB.

HOW I AM FIXING IT: You don't need to be involved in every sector to do well. You don't need to buy every stock someone likes to do well. With the right picks in sectors you know well, any portfolio can crush the market.

In 2021, I will focus on companies that I truly understand in sectors that I have a good grasp of. I am always open to learning about new sectors or new companies, but it is essential to do the required amount of due diligence before buying.

Thank you so much everyone for a great year. I cannot wait to see what 2021 will bring!