#40 2022 in review
As we wrap up the year, it's been a challenging one for investors with an interest rate hike and recession concerns causing uncertainty and volatility in the markets. Despite these challenges, there have been some bright spots and opportunities for those willing to navigate the tumultuous waters.
Today's year-end wrap-up post will revisit and highlight the most notable topics of the past year. Thank you for following along with us throughout the year and we look forward to continuing to provide valuable insights in the future.
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We are happy to announce that we have had many new subscribers in the last quarter. The newsletter started in March with 0 followers. We reached 100 subscribers in June, 1000 in September, and closed the year with 2500. That means most of the people didn’t have the chance to read some older post we find interesting. Personally, the posts we are most "proud" of are the series of 3 articles developing a little bit more the topics in depth.
Companies’ write ups
We somehow found most people like to read these write ups to confirm their views and feel more confortable with their ideas. That’s why we are not very fond of very specific analysis or price targets. Companies are dynamic entities trying to survive daily in the fierce battleground of capitalism. We don't know what will happen in the economy next year, whether Google will be disrupted by Chat GPT or whether the Metaverse will remain another of the many failures of innovators. Therefore, we tend to focus on the qualitative and intangibles aspects of the companies, what they have achieved and how they face the future ahead.
Management
For us, one of the main parts of the entrepreneurial action, hence the investing act, is to understand the capacity for value creation, asset allocation and incentives. For that, we have reflect and wrote two series on:
Management & incentive schemes: the good, the bad and the ugly
The rebel allocators: parts I, II & III
Drivers of value creation
The holy grail of long-term investing and the intrinsic metrics to create value. We used Costco, Walmart or LVMH to understand what drove value along the last years.
Compounding value: parts I, II & III
Portfolio management
A framework for decision-making and capital allocation: improving the quality while reducing the number of decisions, position sizing and how to react to market volatility.
Portfolio management: parts I, II & III
Economy
In a financial year driven by the central banks announcements, it is important to understand their dynamics and interventions:
An economic framework for investing: the Austrian School: A model on how to understand human actions and become better investors
Inflation and the inevitable hangover: Limiting market prices has always failed. Why should it be different with money?
The Big Long: How the manipulation in the money supply has inextricably affected market valuations during the last decade. That which is seen, and that which is not seen.
Making sense of Bitcoin: The monetary revolution of a speculative asset.
The never-ending dream: Currency depreciation to gain competitiveness. For the umpteenth time, it doesn’t work.
A breeding ground for the GFC: from Volcker to Bernanke: Brief notes on economic and financial history
Books
Reads of the first half of 2022
Reads of the 3rd quarter of 2022
Reads of the 4th quarter of 2022 and year summary
Miscellanies
Siren call: share repurchases: CEOs always refer to these programs as giving money back to shareholders. But what if it comes at a high cost?
Incentives, innovation & management: Traces to identify "outsider" CEOs and why some companies perform better than others in the long term
Disruption gets too much attention: What some Tech companies could learn from the big industrials of our time
Value speculators: A different approach to the dilemma of investors against speculators
Standing on the shoulders of giants: Investment principles for a happier and wealthier life
All Blacks, culture and investing: How we can learn from the All Blacks principles and apply them to identify outstanding corporate cultures and management teams
Show me the value: Markets play constantly the game of thimblerig with us.
The Chinese straw man fallacy: It is time to remove the blindfold over our eyes.
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Great job ECR Team! Looking forward to seeing what you are going to offer in 2023.
Only a small appreciation from my humble opinion, did you forget the Semler's 2 pages summary?
Best wishes
Thank you, appreciate! Great content all year round and great review! Have a great 2023!