What I’m Trading: Tristan
Occupation: Co-founder of Sempo
Industry: Technology, Humanitarian Aid
Age: 20
Location: Melbourne, Australia
What do you invest for?
I invest in the future I want to see.
You have three major assets in your life; your time, your money and your knowledge. Efficiently deploying all three to have the greatest impact possible and build a future that the next generation is excited to live in— that’s what gets me up in the morning.
A quote by Elon Musk particularly resonates with me:
“When something is important enough, you do it even if the odds are not in your favor.”
How much of your income do you put into the market?
I lived in Sydney for nearly a year, high rental prices ate into most of my (tiny) startup salary. However, I do try to invest at least 30% — 40% of my income into stocks, ETFs and other investments.
Where does the rest of your money go?
Rent, Travelling, Food, Public Transport, Aviation.
I think it’s important to live within your means, but also spend your money on things that you enjoy.
How much time do you spend on your portfolio each week?
About 3/4 hours.
I generally spend a few minutes each day checking for critical announcements and a couple of hours each weekend doing deeper research on current companies and new investment ideas.
What’s in your Stake portfolio right now?
I’m bullish on the long term prospects of Facebook. In my opinion, Mark Zuckerberg is not only one of the best CEOs of our time in terms of his ability to spot competitors and buy (Instagram) or copy (Snapchat) companies, capital allocation and value creation — The Outsiders.
He’s also genuinely trying to make a real difference on the future of humanity. Over 2.5 billion people, or ~30% of the planet, log into Facebook at least once per month. This is phenomenal. When Facebook says they are spending more time and resources on creating ‘genuine’ connections — they mean it — even if it results in hurting their impressive margins in the short term.
In terms of my non-Stake liquid portfolio (in order of position size):
- Term Deposit (boring…. I know)
- Tesla (TSLA)
- Cobalt Blue (COB)
- Crypto (BTC, ETH, XLM, MKR, ZRX, BLT, BCH)
- Afterpay (APT)
- Diversified ETFs/Bonds (Raiz & Spaceship)
- Neometals (NMT)
Previous investments no longer held:
- Galaxy Resources Limited (GXY)
- AIS Resources (AIS)
- Phytotech (MMJ)
- SolarCity (SCTY)
How are your returns?
Absolute realised returns:
2016 — 206%
2017 — 135%
2018 so far — 154% (unrealized)
This doesn’t include ridiculous crypto returns in 2016/2017/2018 (500%+) as I consider it more luck than any skill at this point in time. This will change as the market matures.
What are you watching?
Spotify and Square.
Spotify: I was fascinated by their direct listing IPO and followed it closely (but didn’t buy). More recently, I was actually at a Stake meet up discussing stocks — everyone spoke about how 1. they pay for Spotify and 2. It’s probably the last subscription they would stop paying for. Everyone loves their music. I think it could be interesting to see the effect of artists publishing directly to Spotify without a record label has on margins.
Square: Jack Dorsey is a founder with an impressive track record. Square started by building a seamless product for accepting payments in-store (and now digitally via their Weekly acquisition). Now, their offering is expanding to include Lending, Analytics, Square cash, Payroll and even bitcoin payments to name a few. Also, their gross margin has improved from 23% in 2013 to 38% in 2017. I’m keeping my eye on this stock.
What’s the best trade you’ve ever made?
The best investment I’ve made, without a doubt, has been into myself.
I’m 20 — yet, I’ve already started multiple e-commerce businesses, which gave me the flexibility to do the things I want to do in life at a young age. I realised pretty early on in life that ‘selling more shit on the internet’ doesn’t create the positive change that I want to see in the world. No offence to Jeff Bezos.
I’m self taught in finance and software development and am now pursuing my own VC-backed company, Sempo, to help NGOs deliver cash assistance to the world’s most vulnerable.
I started actively trading at 16 when I set up a Commsec account under my dad’s name (with his permission of course). I used to get so frustrated by the fact I couldn’t invest, own and trade stocks under 18.
To be honest, my first trade was pretty lucky — I bought into the lithium market early, snagging Galaxy Resources Limited (GXY) at 20c per share. I ended up selling most of my GXY at ~60c per share. I also had a relatively small exposure to Neometals Ltd (NMT).
What’s your strategy?
I’d probably be considered a momentum trader by a professional investor, but I’m trying to focus more on long-term fundamentals.
I haven’t formulated a true trading strategy yet as I’m still young, experimenting and learning as much as I can.
I don’t purchase stocks without doing some sort of financial model and reading the 10-Q and 10-K thoroughly. I generally try to set a ‘target price’ for a certain time frame in these models, and justify why. This means I can come back to that number at future points in time and justify either buying more (if the stock is relatively undervalued), holding or selling.
Is there anything you’re trying to improve about your strategy?
I’m trying to dedicate more time to deep research and producing DCF/NPV models, particularly for tech companies. A discounted cash flow (DCF) model, is a way of valuing a company or project by looking at potential future cash flows over time minus cost of capital. Net present value (NPV) is used in a DCF and is basically the idea that a dollar today, is worth more than a dollar tomorrow.
I recently started sharing my opinions and research on medium, with Raiz and Afterpay being my most popular articles to date.
Furthermore, I’ve started putting more focus on general portfolio management, spending time learning about modern portfolio theory and risk management. The volatility in my portfolio is still insane (10% movements are not uncommon).
How did you first get in to trading?
I first signed up to ASX Stock Market game at 14 after reading ‘Understanding Wall Street: 5th Edition’.
Do you remember the first stock you bought?
Galaxy Resources. It’s still my best realised investment to date and I regret selling it so early on. Lesson learnt, double down on your winners.
Any lessons you’d give to someone who’s never invested or traded before?
The basics of stocks are simple; Shares Outstanding, Share Price, Market Cap, Cash, Debt and Enterprise Value. Once you get the basics down, you need to focus on understanding one or two industries and a handful of stocks deeply. That’s how you get good at trading.
For me it’s primarily tech stocks, because 1. I run a tech company, so I get exposure to the industry and 2. I’m deeply passionate about technology and the impact it can have on the world.
Who do you lean on for advice with trading?
My close friend, Jay Stanic. He’s currently studying CS and finance at University, but understands finance in more depth than many people I’ve met who have masters degrees. This guy will run a massive hedge fund one day.
If you were to buy a US stock or ETF right now, what would you buy?
ICYMI: make your own decisions
This is not investment advice, just my opinion. It doesn’t reflect any opinions of Stake. I’m as fresh to this as the next person off the street. Do your own research and make your own decisions.
