Could you become a multi-zillionaire ISA investor? Inspiration comes from Ted Weschler, who works for Warren Buffett and helps manages Berkshire Hathaway’s common-stock portfolio.
Mr Weschler was outed by ProPublica as having $264m in his Roth IRA at the end of 2018 (a Roth IRA is similar to an ISA).
“each $1 saved as a 22 year old in New York City grew over the ensuing 35 years to over $9,000 – certainly not an expected result, but the sort of example that can hopefully help motivate generations of future savers.”
Turning $1 into $9,000 implies a 29.7% CAGR over the 35 years. Importantly, Mr Weschler said he invested only in stocks other people could also buy.
29.7% a year for 35 years is some going. But apparently one or two UK private investors are on a similar trajectory. Take the Twitter user Glasshalfull1, who reported at the end of 2020 that his 10-year returns equated to a 44% CAGR…
…and the other day said H1 2021 had witnessed a further 59% return:
10 years at 44% plus a further 59% for six months turns £1k into £63k. Repeat for another 10.5 years then gives £3.9m.
Start with £100k in an ISA/SIPP instead and, at that rate, after 21 years you would have £390m…
…as well as a spot on the Sunday Times Rich List, your own ProPublica expose and a job offer from Mr Buffett.
Mr Glasshalfull1’s portfolio does seem genuine. The six shares he mentions in that half-year tweet have indeed rallied between 31% and 150%, and he mentioned all of them at the start of the year (RGBP, EQLS, GMR, WEY, OMIP, SMRT):
The average gain of the top six winners is 65% and Mr Glasshalfull1 admits the 59% overall gain is a “manifestation of a small number of large core positions achieving strong price uplifts”.
Clearly some good small-cap stock-picking has occurred through a strategy of hunting “companies generally that are reporting strong or “ahead” statements, delivering recurring revenues, improving margins and priced incorrectly”. But I note the returns are amplified by greater trading and reinvestment activity. For example, in that above tweet, RGBP was sold and repurchased five months later at a lower price. And there are quick trades such as this:
Perhaps that is why I may not feature in ProPublica just yet; I would ride out a share price slide rather than sell out and try to buy back in at a lower price. I’m also a bit picky (too picky?) about which shares I buy.
I don’t know which shares Mr Weschler owns but Mr Glasshalfull1 has listed many of his here:
He also buys small ‘starter’ positions, which could help him to spot better buying opportunities in the future. I have never liked the concept of starter positions, but maybe that is something I have also got wrong.
If Mr Glasshalfull1’s 44% CAGR over 10 years is something you aspire to, bear in mind he may no longer post his portfolio updates:
“I worry if this reporting impacts investors with portfolios going through a rough patch when all around are reporting regularly on share-price movement? It’s made me question whether to report my own portfolio performance publicly twice a year. This may be the last one”.
Would be a shame to see his updates cease. But if they do, I suppose in time we could rely on his TR1s through the RNS to keep track of the buys and sells!