2022 Review - Lessons

 This will be on lessons learnt in 2022

1) Do not buy quality without concern for valuation

2) Do not buying too large position at one go

I bought Tencent and Prosus to around 18/% of portfolio in late 2021, thinking that Tencent is a high quality stock despite that Tencent is quite expensive. My average price on Tencent is around $450-$460. 

However, Tencent fell by a lot in 2022. During the fall, I did not average down since it was a large position in my portfolio. 

So the lesson is that buy quality at reasonable price and buy slowly. Reasonable price can be cheaper at times.

3) Don't follow superinvestor's purchases - you do not have their conviction / they may sell their stake later.  

In 2021, I follow Mr Charlie Munger and Mr Monish Prabrai's purchases to load up on Alibaba and suffer losses. In late 2021, Mr Prabrai sold  Alibaba. 

I sold Baba in early 2022, as I conclude that Baba's moat is affected by JD, Pinduoduo and in southeast asia -- Shopee. The sale was done at a loss. Nonetheless, it taught me a lessson of not following uperinvestor's purchases. I do not have their conviction and they may sell their stake later.  

4) Do not sell put option

This year, I sold put option around 2-3 times. The money earn is not a lot. But the last put option sold -- selling put option for Google @87 -- caused me to not buy Google at $87. 

5) How does it matter to you if you know A or B?

6) Aggressiveness -- when I should get more aggressive

Howard Marks' memo "What Really Matters" provided two insights to me. 

First, does it matter to me if I know when Fed will reduce interest rates? Probaby not.

Second, how aggressive should I be in my positioning or asset allocation? When should I get more aggressive and when less? This is a question which I will focus more time to study next year.