I need to start posting more because writing helps record my thought process in the moment. It helps with thinking and communicating. I will try to reconcile some of my past holdings that I neglected to post about here with the present and ultimately they will all lead to future decisions.
RFP worked out well in the past, but I have continued to change. The Terry Smith of Fundsmith has a pitch of what 2/20 means. In 2010, 45 years after the start of BRK, $1,000 would have compounded into 4.3 million dollars or 4,300x. If it had been structured as as 2/20 vehicle, the investor would have only compounded it to $300,000 or 300x. It is 13.5% CAGR vs. 20.5% for the 45 years. Yes, there are nuances in the calculations, but my takeaway is it will be far better to bet on myself and learn how to invest than pay fees.
It is difficult to pay anyone that amount, but one man that I probably would would be Charlie Munger. I am not sure if I am blindly just cloning him as I knew all the hype with China TAM yet it is a very red country and the Tech crackdown should show how everyone that is not the Party is just a cockroach. The Party does as it pleases like one can squash a cockroach at ease.
I truly believe BABA is a great business with a low capex in its core business of E-commerce. That excess cash flow is being invested into a variety of businesses and the crown jewel of AliCloud. AliPay can be considered a write-off even considering it was once valued at more than the 300 billion or so that the entire BABA is trading at today. Today, the Company is at 100 dollars a share or 273 billion dollar market cap. My various entry prices are averaging to 186 dollars. It has been brutal, but volatility is the price of equity returns. Hopefully, just the return of my capital here. Charlie is using leverage in this investment and I get his reasons. I am doing the same and had been before knowing he was "doubling down." I am not 98 and financially independent. I should be more cautious in my investments, but I also need to be aggressive if I ever want to "get there."
No matter the outcome of this one decision, the decision to learn from the wisdom of Munger should lead me to becoming more "wise." However, I would want this decision to work out financially as well. I have to remember to look past the short-term, but the leverage does put me in a precarious position to the swings. I am not sure how much more can my portfolio handle with the leverage, but have to risk it for the biscuit.
