Turning a $3800 portfolio into $1M in 30 years
Issue #6 - my head (and portfolio) hurts.
Welcome👋🏽
In this newsletter series, I document how I turn a $3800 investment portfolio into $1M in 30 years, with no additional investment.
To do this I need a 19% annualised return - the same as Warren Buffett achieved over his investing career.
Easy? Fu** no.
Probable? Nah.
Challenge? Accepted!
What I will say is that I’ve got a trick up my sleeve that old man Buffett didn’t.
Crypto.
If you’ve been reading for a while and still think, “This is dumb because crypto is a scam”, that’s ok.
I’m not here to change your mind. I’ll just show you my (future) Lambo.
Just kidding - I ain’t spending $500K on a Lambo.
When I could spend it on a Porsche 911 GT3 RS.
⚠️ DISCLAIMER ⚠️
The content provided by PROJECT 10X PTY LTD (Filip Brnadic) is for educational purposes only and is not financial or investment advice. PROJECT 10X PTY LTD is not a licensed financial adviser under Australian law.
Investing involves risk, including the potential loss of all funds. Seek independent advice before making any financial decisions.
Before we kick things off, here are 2 things we’ve been discussing lately.
Selling the Top of the Crypto Bull Run #7: Did you BTFD?
Selling the Top of the Crypto Bull Run
Welcome to the monthly free edition of the “Selling the top of the crypto bull run” newsletter. If you find this series valuable and want to receive weekly updates then grab yourself a paid subscription - it costs less than a coffee a week and you don’t have to f*** around on Trading View.
Inflation. War. Taxes. We’re F*****: But there is a way out.
Inflation. War. Taxes. We're f*****
Welcome 👋🏽 The markets have been ranging for the last 3 weeks. I think they’ll continue to range for the rest of Q2, so instead of another Selling the Top newsletter where I show you that nothing has changed, it’s time we reassess our strategy. This way, I don’t feel like a beta cuck loser parroting the same BS, and you get some perspective of why we d…
And here’s one from the archives that you’ll want to read.
How Much Do You Really Need to Retire?
How Much Do You Really Need to Retire?
It doesn’t matter whether you’re 20, 30 or 60. If you’re not thinking about what life will be like when you’re old, frail and piss your pants on the reg, then you’re asking for trouble.. at your weakest. A more elegant way to put it, perhaps is that
Back to the newsletter series.
Each month, I’ll cover 3 things:
Macro:
what does the macro environment look like?
Is it in line with my macro thesis?
Portfolio:
changes to my public eToro portfolio, which has 370+ copiers and $1.5M AUM.
key stats, including annualised return, copier growth, AUM growth
Results:
are we on track to hit $1M in 30 years?
Now, I need you to also do something for me.
If you ever see my portfolio fall below a 19% annualised return, I need you to get loud in the comments.
Call me names. Berate me. Laugh. Do SOMETHING!
It’ll just fuel me, and it makes for fun reading.
Macro 📚
Earlier in the week, I discussed how the recent unemployment, QT tapering and non-farm payroll data are bullish for crypto.
We’ve also seen the ISM Manufacturing PMI (PMI) data trend higher. For those of you who have read my global liquidity cycle thesis, the PMI is a leading indicator of the expansion and contraction of the US economy.
The folks at Bank of America (BofA) Global Research show that the manufacturing recession has ended, and a continued upcycle is underway.
We know that the peaks and troughs in BTC price and PMI are correlated, so if there is an upcycle in PMI, BTC price will follow.
Now we know that rate cuts have started.
The Swiss central bank cut rates by 0.25% a few weeks ago. The Swedish central bank cut rates by 0.25% on Wednesday.
➡️ The ECB is expected to cut rates in June
➡️ The BOE is expected to cut rates in June
➡️ The FED is expected to cut rates in September
Now, most people will tell you that markets dump when the FED pivots to rate cuts and point to a picture like this 👇🏽
What they fail to point out are the soft landing periods of 1965, 1984, and 1994, which show strong returns for the S&P500.
I believe the US Federal Reserve has achieved a soft landing, given that inflation has continued to fall (see Thursday’s CPI print) and the labour market is the strongest it has been in decades, all achieved while avoiding a recession.
Given the above and the fact that crypto trades like the S&P500 on (all the) steroids, I’m pretty confident that we’ve got a one-way ticket to the moon…via our future lambo.
Portfolio 📉
I made one trade in April. I exited my original Amazon AMZN 0.00%↑ position for a total return of 60% or 26% annualised.
I closed other AMZN positions for a profit, but they were opened later only because I needed to fund my portfolio courtesy of eToro’s rule changes.
Why did I close this trade?
AMZN is back at all-time highs (ATH), and the upside is limited compared to other plays I’m tracking (more on this next week). The stock’s annualised return has been ~15% over the last 5 years and with AMZN back at ATH, I think these returns continue.
Don’t get me wrong, that’s great, but it ain’t 19% annualised.
The second reason I closed the trade is that there is plenty of positive media around Amazon right now, which means normies will get greedy and bid at ATH (which we’re seeing).
Old man Buffett once said,
“be fearful when others are greedy and greedy when others are fearful”.
Well, we’re at ATH, sentiment is high, and retail is piling in.
That’s my cue to exit.
I mean, does it get any better than this sort of coverage from mainstream media?
Ad sales are up ~30% YoY with ad revenue jumping from $31B to $41B.
Amazon will invest $9B in Singapore to expand cloud services
HCLTech and Amazon partner to explore and develop GenAI technology
The final piece of the puzzle that makes me feel warm and fuzzy more than anything else is that Jeff Bezos has been unloading $8.5B worth of Amazon stock recently.
We managed to sell above his exit price.
Take that Jeff!
We’re now sitting in a 6% cash position.
Now, to the uh not-so-good news.
April was a “tough” month, with the portfolio down 25%.
Some of you might be thinking, why didn’t you sell and buy back lower?
To that, I say, do I look like some sort of handsome Oracle to you?
This is a relatively passive investment portfolio with a medium to long-term time horizon.
I have my entries, I have my exits, and I don’t care about what happens in between as long as my macro view is intact. Remember, Amazon took 2 years to play out.
This way, I don’t spend my life in front of a computer screen, yet I still achieve a 47% annualised return or ~2.5 times the return of the NASDAQ.
I’ll take that.
Performance 📖
In previous newsletters, I would show you the growth of my own portfolio. Since eToro changed the minimum equity rules for Popular Investors (PIs), I’ve had to fund my account with over $40K.
That’s f***** with this newsletter series. Good one, eToro.
So, I’ve decided to calculate the growth using my monthly stats instead 👇🏽
So, what do the numbers tell us?
If I started in January 2021 with $3800, the portfolio should hit $1M by January 2051 (30 yrs).
Even after our April speed bump, we’re already 3 years ahead of schedule.
Extrapolating my returns, we see that the portfolio should hit $1M by November 2033 (roughly 9 years).
I’m not saying it’ll get there. My goal has always been $1M in 30 years, with a single investment of $3800. If we get there sooner, great!
If you want your eToro portfolio to reach $1M at the same time, you would now have to copy with $13,167.
Or you could fast-track the process by implementing the same strategy I told my brother and sister which is Dollar Cost Average (DCA) with a small amount each month.
This is not financial advice.
I’m not saying you should do it.
I’m just laying out the data because I’ve got a fetish for numbers.
That’s all for now.
Catch you next week
✌🏽
Filip