Why I'm writing this down

I have been thinking about starting this site for a while without doing anything about it. From January 2027 my account is entered in an externally reported investment competition, and that gave me a reason to stop postponing it.

The timing is the point. I wanted to begin before there are any results.

It would be easier to wait two or three years, see how the performance turned out, and then write the site around whatever worked. Everyone who does that ends up producing something cleaner than the reality. You go back through the positions that worked, reconstruct the reasoning, and the process looks far more deliberate than it felt at the time. It is not usually dishonest. It is just what hindsight does.

So the letters exist mainly so that a reader in 2029 can compare what I actually believed in 2026 with what happened afterwards. Some of it will look sensible. Some of the positions I am confident about now will look poorly judged, and there will be stretches where the portfolio is well underwater. I would rather that be on the record than edited out of it.

What this is

My own account and my own money. No fund, no outside capital, no clients, and I do not manage money for anyone else. There is no course and no paid stock-picking service attached to any of this.

The portfolio can be concentrated and I use leverage, so returns are volatile and drawdowns can be large. I trade both long and short.

From January the account is entered in Money Manager Verified Ratings, the category for accounts over $1,000,000 that runs alongside the United States Investing Championship. I send the brokerage statements each month, the organisers compile and publish the standings, and whatever they publish gets reproduced here. The reason for entering is straightforward: I would rather someone else report the numbers than ask anyone to take my word for them.

How the process developed

Fundamental analysis is still the foundation and I expect it always will be. Most of my time goes into understanding industries and companies: supply and demand, what an asset is worth, what it costs to replace, balance sheets, cash flow, how management allocates capital, how much new capacity is under construction, how long it takes to arrive, and what the share price already assumes.

I am drawn to industries where supply responds slowly. A vessel ordered today arrives in two or three years, and only if there is a berth available. A copper mine takes closer to a decade from discovery to first production. Offshore rigs scrapped in a downturn do not come back because dayrates recovered. Refining capacity does not appear because margins were good last quarter.

That lag is what produces the cycle. Long stretches of poor returns push capital out. Companies stop ordering, capacity growth slows, the investor base gets smaller and more specialised, and eventually the supply side becomes interesting even if demand does nothing remarkable.

I want to be careful not to overstate this. These industries are not undiscovered. There are analysts covering them, specialist funds that know them extremely well, and plenty of people who understand the orderbook better than I do. What does happen is that generalist interest disappears for years at a time, capital allocation becomes very one-sided, and the marginal buyer stops showing up. That is usually enough.

Where I kept getting it wrong

My recurring problem has not been picking the wrong industries. It has been timing.

I have held positions where I was broadly right about the industry, right about the company, and right about the eventual outcome, and still lost money because I bought a year too early. In cyclical businesses that is an expensive way to be correct. The fundamentals can improve for several quarters while the share price keeps falling. A stock that is genuinely cheap can become considerably cheaper, and a thesis that turns out to be right can take 30 or 50 per cent out of the position before the market pays any attention.

That experience is what pushed me toward technical analysis, and specifically toward momentum.

I used to treat fundamental and technical analysis as more or less separate activities, and I was fairly dismissive of the second one. I do not see it that way now. I am not trying to predict anything from lines on a chart, I do not run a mechanical system, and I am not going to buy something because an indicator crossed a level. What I have come round to is that price behaviour is information, and that ignoring it was costing me money.

The things I watch are ordinary enough: trend, relative strength, whether a move persists or fades, how a stock reacts to good and bad news, whether buying gets rewarded or sold into, whether momentum is improving or deteriorating. None of it tells me what a company is worth. It tells me whether the market has started to notice.

I no longer feel that I have to buy something simply because I think it is cheap.

Often the better decision is to do the work, form the view, and then wait until the price action suggests the market is beginning to agree. The opportunity cost of waiting is usually smaller than the cost of sitting through the last leg down at full size.

The same logic applies on the way out. Fundamentals can still look attractive while momentum deteriorates, and that combination is worth taking seriously rather than explaining away. It does not automatically mean I sell. It means I go back and ask what the market might be seeing that I have not. Sometimes the answer is nothing. Often enough it is not.

Four questions

If I had to reduce the process to something I could check a position against, it would be these.

What is mispriced, and why do I think so? That is the fundamental work and it comes first. Without a specific answer here there is no position, regardless of how the chart looks.

Why would the mispricing close? Usually this is the capital cycle: supply that cannot respond quickly, capacity that was never built, an industry that spent a decade underinvesting. A thesis without a mechanism is just an opinion about value.

Is the market starting to recognise it? This is where price behaviour comes in, and where I have made most of my improvement.

How much can I afford to be wrong, or early? Which determines size.

Building positions in stages

One consequence of all this is that I have largely stopped treating an investment as a binary decision. It is less often buy or do not buy, and more often a question of how much, and when.

In practice that means I might take a smaller starting position when the fundamental case is attractive but nothing in the price says the market cares yet, then add as both the thesis and the price action develop. If the two are pointing in opposite directions I am usually better off waiting. If momentum deteriorates badly while I am already in size, that is a reason to reduce even if I still believe the underlying case. Position size tracks how much uncertainty is left, not how strongly I feel.

I am still working on this part. I do not have it codified, and I would rather say so here than present it as a finished system. Fundamentally driven, with momentum used for timing and risk management, is about as precise as I can honestly be at the moment.

How well any of it works is what the next couple of years are for.