Turning a $3800 portfolio into $1M in 30 years
Issue #11 - An unexpected September (+9%)
Welcome👋🏽
Here’s what you may have missed in the last month💡
‘Selling the Top’ series
My new risk-on/risk-off tool - my version of a crystal ball
and here’s one of my classics…
How I view Investing vs Buying a Home - the numbers behind the age old debate.
If you like what you see, consider grabbing a paid subscription before the price increase on 1 November👇🏼
⚠️ 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.
What is this newsletter series about? 🤔
This newsletter series tracks me turning a single $3800 investment into $1M in 30 years through my public investment portfolio.
That way, you and 450+ copiers from all over the world can keep me accountable when I say
To achieve this, I must outperform Warren Buffet in his prime… and if you know anything about Buffet in his prime… not only was he ballin’👇🏼 he’s also considered one of the greatest investors of our time.
So, this newsletter serves as
my macro review
a highlight of my portfolio changes
and a check-in on how we’re tracking towards the $1M goal.
Now, if you’re having the same thoughts as some of my “reply guys” everytime I post about this newsletter series👇🏼
Then you’ve taken a wrong turn in your logic.
Macro 📚
I always start with a big picture view, so we’re not left scrambling to reallocate every time we see an article like this.
Besides, reallocating based on mainstream media (MSM) is reserved for the folks we’ll be earning our returns from.
🟢 Global easing cycle has begun: The US Fed has officially joined the global rate cutting cycle. Despite what you’ve heard, a normalisation cut is good news for equities (and even risk-on assets like NASDAQ and BTC), with the S&P 500 returning 13% in the 12 months following a rate cut.
🔴 Geopolitical Risks are increasing: There are increasing geopolitical tensions, especially in the Middle East with Israel and Iran. Again, my personal philosophy and one that I’ve adopted from Raoul Pal is that “there’s always a war somewhere” and if we’re going to stay out of markets due to war, then we’d never enter in the first place. I’d take it one step further and say, the only time I would scale out as a result of war is if there was a perceived imminent threat to western countries or democracy.
🔴 US jobs data is stronger than expected: Non-farm payrolls data showed over 254,000 jobs added compared to the forecast 130,000. The unemployment rate has also been steadily declining from 4.3% to 4.2% and most recently to 4.1%. If you recall, every man and his dog were pontificating about how a recession is imminent according to the “Sahm rule”. That was yet again, more MSM noise as shown by the unemployment rate ⬇️.
Upon this release, the market immediately shifted to a lower probability of a 50-bps cut in November.
Due to the stronger jobs data and increased geopolitical risk (among other things), the DXY is back above support 🔴
Net US Fed liquidity is still declining 🔴
While global liquidity is increasing steadily 🟢
But how do we interpret all this jargon into something actionable?
I’m an Engineer by trade, so the best way for me to wrap my head around this macro data is through the use of signals. On this basis, I developed a risk-on/risk-off tool based on macro and crypto data and shared it with you all👇🏼
Ultimately, it’s my guiding star 🌠. My crystal ball 🔮. It is there to tell me how I should be allocated.
🔴 max risk-off: sitting in cash or cash equivalents.
🟡 risk-off: some capital allocated, but not to risk-on assets (tech, crypto)
🟡 risk-on: some capital allocated to risk-on assets, but not 100%
🟢 max risk-on: 100% allocated to risk-on assets.
We are currently in “risk-on” mode.
I should also point out that paid subscribers receive updates in the group chat every time this tool changes status.
Portfolio 📉
In September, we opened and closed one BTC trade. This position was less than 5% of our portfolio, it was held for 5 days and resulted in a loss of -4.19%.
I saw more short-term upside in another trade, so the capital was swiftly reallocated to Alibaba (BABA) which is up ~3% since we entered.
I also shared my BABA trade in the paid subscriber chat, along with my thesis, entry and exit strategy.
My thesis for this trade is left curve (or so I like to think).
BABA is down -81% from ATH. Even with its recent recovery it is still down -64%.
Therefore, if:
✅ China’s Central Bank (PBOC) decided stimulus is the answer to their woes (they did); and
✅ The stock is heavily oversold compared to historical prices; and
✅ tech/e-commerce stocks tend to perform well in easing macro environments.
Then number go up. It really is that simple for me. I’m not here to perform mental gymnastics.
In terms of overall portfolio performance, we have a 42% annualised return and a YTD return of 29%.
I’m not happy with the YTD returns for a crypto-centric portfolio, but I’m confident Q4 will yield more upside.
The portfolio was up 9.40% in September.
We started September with $1.64M AUM and 458 copiers and ended the month with $1.85M AUM and 452 copiers.
To the 6 copiers who decided to part ways, I say “adios amigos!”.
Goal Tracking 📖
Background
I funded my eToro account with $3800 USD ($5000 AUD) on 1 January 2021.
I need a 19% annualised return to turn a $3800 portfolio into $1M in 30 years.
This portfolio will hit $1M by January 2051 if I achieve the required return.
We're 3 years and 5 months ahead of schedule and outperforming a buy-and-hold BTC strategy over the same time frame.
This means that
if you invested $100K into BTC on January 2021 (when I joined eToro), you would have $219K.
if you invested $100K and copied my trades on eToro, you would have $386K.
Extrapolating my annualised return, the portfolio should hit $1M by September 2035 or in ~11 years.
I’m not saying we’ll get there. My only goal is to show you that you too, can turn a small amount of money into a lot of money given enough time.
If you’re thinking about copying my trades and you want your eToro portfolio to reach $1M at the same time, you would now have to copy with $14,672.
Or you could speed things up using a DCA strategy and make small monthly deposits.
If you decide to join eToro and copy my trades, follow the steps below to get yourself a FREE paid subscription to this newsletter to go along with it!👇🏼
This is not financial advice.
I’m just laying out the data because numbers are my love language (Alina, if you’re reading this, it’s also “receiving gifts” 💙)
That’s all for now.
Catch you next week.
✌🏽
Filip