2022 Annual Letter
Last year, I wrote my first annual letter while self-isolating for COVID. I’m writing this second one under more peculiar - but much better - circumstances. My wife and I are expecting our first baby at the beginning of the year, which is why I am writing this letter several weeks before the end of 2022. In fact, I hope that by the time you read this, all three of us will be home resting and enjoying our new wonderful addition to the family.
My portfolio, which is updated every quarter for paying subscribers, finishes the year with -29.9%, after +47.4% in 2021, +41.8% in 2020 and 30.2% in 2019, when I started managing capital for some family members and close friends.
As mentioned in previous quarterly publications (link 1, link 2 and link 3), global macroeconomic uncertainty has created numerous opportunities that I personally hadn’t seen in years. I can say that, although this year’s results haven’t been as good, I finish the year knowing that I have taken advantage of the opportunities provided by the market with the happiness of a kid in a candy store. Throughout the year, I have substantially reduced the number of companies in my portfolio in order to focus only on my best ideas. I believe I have planted the right seeds to reap good results over the next 5–10 years and, in fact, I am more excited for what’s to come than for what’s already happened the last 4 years combined. Except for occasional tweaks to the portfolio if some management teams make any bad decisions or if a company on my watchlist gets to an attractive price, I am satisfied with my current portfolio to face what may come.
During 2022 I’ve had enough reasons to be grateful, both personally and professionally. I didn't want to end this post without thanking all the paying subscribers who support my work on the blog. Having an established reader base behind has allowed me to write for more than a year and continue to improve as an investor. At this rate, the blog will soon reach 100 annual subscribers, and although I still can't dedicate myself exclusively to this, sooner rather than later I’ll be able to make the blog my main job. To be honest, it would have been impossible to keep this going without your support. We all have the same 24 hours a day, and for those who choose to venture out and launch a similar project while keeping their main job, it all comes down to whether one is willing to sacrifice hours of sleep, family, or leisure for a project that requires many hours and a lot of discipline. The recent proliferation of Substacks is a consequence of the low existing barriers to entry, but only authors who contribute enough quality to be backed by a paying subscriber base that will be loyal for years, not months, manage to survive. Hopefully in a few years, I will be able to look back and realize that I was one of the lucky ones to be in that group.
My goal for the blog goes beyond earning money just to accumulate more wealth or raise my standard of living. I’m a simple 28-year-old guy whose big capitalist dream is just to own a house in nature to raise a big family. Having quality time to develop as a person and enjoy my family and friends is what I aspire to. The blog was born as an alternative to pursuing a career as an analyst, focused on growing professionally within the industry in exchange for a substantial reward, which implied leaving my wife and the rest of the family behind. I had always dreamed of working for investors or firms that I admired and respected. When the opportunity was presented to me, but wasn’t offered the possibility of working remotely, I realized that what I had dreamed of did not really fit my personality and my lifestyle. Even if I know that opportunity only knocks once, as a good friend told me, I sleep well at night knowing that I made the right decision by not packing my bags.
Thanks to you, the paying subscribers who support the blog, I can do what I like best at home and surrounded by the people I want to share my life with. So thank you very much again, you can't imagine how grateful I feel. I will continue to do my best to maintain the quality of the analyses, and as always I’m available to exchange ideas (@Finding_Moats or findingmoatsblog@gmail.com).
Over the next 12 months I’ll write about some companies with unique business models, like some of the ones you can see in the following table, and also some investment ideas like the one I recently published (link), but you can always contact me if you have any other suggestions. As a simple reminder, I spend 100+ hours on every company to delve into the important details that will determine the long-term success or failure of the companies analyzed. In an industry that mainly focuses on the variables for the next few quarters, this investment service aims to provide something different.
Below you can find sample posts to get an idea of the work behind each analysis. I've just removed the paywall of my analysis on Givaudan, Robertet, and the fragrance and flavor industries (link) so that you can get a better idea of what to expect before becoming a paying subscriber.
https://findingmoatsinternational.substack.com/s/sample-posts
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*The following content is exclusive to paid subscribers*