161: 2nd Half Stock Draft Results

Welcome to The Invested Dads Podcast, simplifying financial topics so that you can take action and make your financial situation better. Helping you to understand the current world of financial planning and investments, here are your hosts, Josh Robb and Austin Wilson.

Austin Wilson:

Hey, hey, hey. Welcome back to The Invested Dad’s Podcast, a podcast where we take you on a journey to better your financial future. I am Austin Wilson, Research Analyst at Hixon Zuercher Capital Management.

Josh Robb:

I’m Josh Robb, Director of Wealth Management at Hixon Zuercher Capital Management. Austin, how could people help us with our podcast in 2023?

Austin Wilson:

2023, we would love it if you would subscribe, if you’re not subscribed, so hit that follow, plus, subscribe, whatever button that is. That way, you get new episodes when they drop each and every Thursday, and we’ve been doing them for a while and we haven’t missed one yet. So, today, we are going to be revisiting the final results of the –

Josh Robb:

It’s official.

Austin Wilson:

… 2022 2nd Half Invested Dads Stock Draft that we did for the 2nd Half of 2022.

Josh Robb:

From July all the way through to December and now that December’s over, we have the official results.

 

[1:03] – Stock Draft Rule Recap

 Austin Wilson:

Absolutely. We want to remind of the rules going in. The rules going in.

Josh Robb:

That not everybody followed.

Austin Wilson:

It was intended to be a buy and hold strategy with no initial position size over 10%. Now, I’m not going to point out names, but some people did not adhere to that and that is really our fault for not putting strict rules on the game.

Josh Robb:

Or just opening it a little more broadly.

Austin Wilson:

Our fault that you cheated.

Josh Robb:

Sure.

Austin Wilson:

But anyway, that was the intention. We’re going to be a little bit stricter about the rules in the system, I think, next year, but whoever won still won, no big deal. So, today’s winner, we’re going to start at the top, we’re going to through all the results. There’s 21 entries.

Josh Robb:

Ooh, nice.

Austin Wilson:

I’m going to read them.

Josh Robb:

You’re going to read them all.

 

[1:50] – The Official Top 5 Standings

 Austin Wilson:

The 2nd Half Stock Draft winner was JoshHunter100.

Josh Robb:

That’s the username.

Austin Wilson:

That’s probably, yeah. It could be Josh Hunter, the guy’s named Josh Hunter.

Josh Robb:

Maybe his middle name is Hunter and his last name is 100.

Austin Wilson:

Probably.

Josh Robb:

Yes.

Austin Wilson:

Or there’s 100 of him.

Josh Robb:

Oh, could be.

Austin Wilson:

He was the 100th one.

Josh Robb:

Josh Hunter.

Austin Wilson:

He gained 22% in a half a year.

Josh Robb:

Nice.

Austin Wilson:

That’s pretty good.

Josh Robb:

Make sure you reach out to us if your name is JoshHunter100 to hello@theinvesteddads.com. We’re going to mail you as something a little special as a thank you for participating and winning.

Austin Wilson:

That is incentive for whoever wins next year to put in their best effort to try and get that swag, we’ll send out it again next year. Josh Hunter, congrats on your win, 22% return in six months is no joke, so JoshHunter100, first place. Second place, WendyM9, 13%-

Josh Robb:

We’re counting down.

Austin Wilson:

That’s right.

Josh Robb:

I think I’m 0-1, so I must be at the bottom.

Austin Wilson:

I’m assuming Wendy is a she. Second place. 13%, still pretty good for six months. Our number three, BestGuesser, 10% return, six months. That’s a pretty good guesser.

Josh Robb:

Third-best guesser.

Austin Wilson:

Fourth place, KNewland12. I know who that is.

Josh Robb:

Our intern, yes.

Austin Wilson:

She’s been on the podcast before, 8% return.

Josh Robb:

Nice.

Austin Wilson:

Very respectable. For reference, those are the people in the Stock Draft that beat the S&P 500 over that six-month period. The S&P 500 with dividends, it returned just about 8%, as well.

Josh Robb:

There you go.

Austin Wilson:

So, that’s the bogie there. Fifth place, AAWilson.

Josh Robb:

Ooh, who’s that?

Austin Wilson:

I don’t know who that is, but that’s probably me. I had a 7% return. We’re going to talk about some things that we did that didn’t work a little bit later.

 

[3:25] – Full Results

 Josh Robb:

Sixth place, JRigWM, 5% return. Seventh place, SMarkley98, 1% return. Eighth place, rounds to 0% return, but positive $482, JRobbHZ.

Josh Robb:

I think that’s me.

Austin Wilson:

You gained $482.

Josh Robb:

That’s right.

Austin Wilson:

Good job, Josh.

Josh Robb:

I know.

Austin Wilson:

Out of $100,000.

Josh Robb:

That’s right. Nailed it.

Austin Wilson:

9th place, BDubz1, $398. We’re going to use dollars on those ones, not percent, because it was low. 10th, 11th, 12th, and 13th place all were sitting on cash.

Josh Robb:

The whole time.

Austin Wilson:

So, they had $100,000 when they started and they ended with $100,000.

Josh Robb:

They did not lose any money.

Austin Wilson:

They did not lose a dime, so that’d be JRob2284, LJSabota, JMiller4848, and TonyHickson all had 100% cash. In 14th place, JasonSummers lost 2%. 15th, AshMil lost five. 16th place, JDMcGlade down 6%. 17th place, TheEverydayAdvisor, minus eight. 20th place, MaddyMiller, minus 11. 19th place ChaseJRose, minus 15. 20th place, KellySue, minus 18, and 21st place, last but not least, WHinks1, minus 26%. That is the full standings, the full results of our Stock Draft. Now, let’s just get it out there, 2022 was no joke.

 

[5:00] – A Rough Year with Rough Results

Josh Robb:

It was a rough year.

Austin Wilson:

It was a rough year for the markets, it was a rough year to be an investor or a portfolio manager, really, no matter how you looked at it.

Josh Robb:

But interesting enough, according to this, the S&P 500 was positive for the 2nd half of the year.

Austin Wilson:

It was.

Josh Robb:

But it ended up the year, negative down double digits, so a lot of volatility early in the year, and really October, November was positive that drove a lot of those gains to bring it back it where it was.

Austin Wilson:

Exactly. It was a challenging year, as made evident by a lot of people underperforming in the market, myself and Josh included.

Josh Robb:

Yes.

Austin Wilson:

Let’s just say that it’s challenging to manage money, especially in this environment when not everything goes up all the time, so that was a tough year. But Josh, before we get into a little bit more details about how we were thinking and how we positioned and why that did and didn’t work, give us a dad joke.

 

[5:50] – Dad Joke of the Week

Josh Robb:

I have a dad joke for you. It’s more of an observation.

Austin Wilson:

I like it.

Josh Robb:

A little while back, we had New Year’s.

Austin Wilson:

We did. Until January 11th, you can say, “Happy New Year’s.”

Josh Robb:

But after that, there’s officially a stop doing it. But it’s more of a critique, I was not really impressed with the New York New Year’s celebration.

Austin Wilson:

Oh yeah?

Josh Robb:

I feel like they always drop the ball.

Austin Wilson:

They always drop the ball. They do. Do you know that the craziness that people go through to be at that event?

Josh Robb:

They’re there at 4:00 in the morning the day before.

Austin Wilson:

Wearing diapers and all of that stuff.

Josh Robb:

It’s crazy.

Austin Wilson:

It’s not worth it, trust me.

Josh Robb:

Unless you’re an astronaut, no task is worth wearing diapers as an adult. I’m just going to throw that out there.

 

[6:32] – Austin’s Strategy: Did it Work?

Austin Wilson:

Josh, that was a good one. We’re not going to go into total detail of all of our holdings but talk about some of our thinking when we went in, how it did or didn’t work for or against us. I’ll start. I positioned really close to the market returns for the 2nd half of the year there. I went in with what I call a hedged approach, so I had some names that were, at that point, already beat down, really sold off, prices were down, growthy stocks, things like that at small positions and things like Bitcoin and ARK Innovation. I had a leveraged PayPal ETF.

Josh Robb:

Oh, interesting.

Austin Wilson:

It was a one and a half leverage PayPal.

Josh Robb:

Did it sink?

Austin Wilson:

Anyway, some of these growthy things really didn’t work out, so I lost some money on those. If I would have just taken a smaller position in this alone, I probably would have beat the market. I had a full 10% position in TLT, which is the long-term treasury ETF.

Josh Robb:

Treasuries didn’t hold well.

Austin Wilson:

At that point, treasuries had already been sold off a ton, longer-term treasuries, more interest rate, risk was high, and I thought yields had bottomed and they hadn’t yet.

Josh Robb:

They had not bottomed.

Austin Wilson:

No, I had thought the yields had peaked, price had bottomed, neither had worked out at that point. They kept going and it worked against me and it was my biggest-

Josh Robb:

It probably went double from that point.

Austin Wilson:

It was my biggest position. That went against me quite a bit and that was my biggest detractor. But I did have some names that did very, very well, so low multiple in terms of price earnings ratio, so cheap, quote unquote. Cheap stocks. US Steel, I think I had a position in. That’s not a recommendation, these are all fake money we’re talking about.

Josh Robb:

We had real money in here.

Austin Wilson:

But it was trading at 1x earnings, so I was like, “Oh, well I’ll take a position in that.” That did really well for me because as interest rates went up and valuations came under pressure, something with one times earnings was not coming under pressure, so things like that did well. I had some energy companies that did well, Schlumberger was one that did pretty well for me. I had some names that did well, I had some names that did not do well, and overall, I had relatively close to market performance for the six-month period, but like we’ve said, it was very hard.

It made it even harder because we made it set up so that it was buy and hold, so you really weren’t supposed to exit positions, so some of those that probably would have unwound before the end of the year, but I wasn’t able to, so it was a challenging thing. Overall, I learned, I was relatively pleased with getting market-ish performance over that really tough period. Hindsight’s 20/20, there are things I wouldn’t have done, looking back.

Josh Robb:

You always regret or have said-

Austin Wilson:

Josh, what about you?

 

[9:00] – Josh’s Strategy: Did it Work?

Josh Robb:

If you recall, my thought processes this year was I was going to choose investments with amazing ticker names, so I invested in things that the ticker spelled out or reference whatever they were doing. Great investment strategy.

Austin Wilson:

Yeah, absolutely.

Josh Robb:

It’s probably the secret sauce to long-term success, as you can see in my $480 gain over a half a year. Pretty much, I had up and down-

Austin Wilson:

Some went for you and some went against you.

Josh Robb:

Really, if you go back and look, I had Cedar Fair, whose ticker was FUN, which is fun-

Austin Wilson:

Great ticker.

Josh Robb:

Cedar Point, close to us up in Sandusky, a big amusement park, is their main attraction, they have other ones around, but it didn’t do well. That was again, just when you look at this year, the way things were going, those are some of the things that struggled as people were inflation-readjusting what they spent money on. Some of those really hurt. I had one that looked at cloud computing, automotive, I had EV or electric vehicle, an ETF there. Just fun names in general, not including the one with FUN, but all in all, they were pretty much flat for the year. There was volatility around… It came down to holding ETFs or mutual funds, the underlying was harder for me to see.

Austin Wilson:

Yup. Right.

Josh Robb:

I didn’t spend a lot of time researching or watching this once I made the investments, so I don’t really know what was going on with them, but I do know that I trailed the S&P pretty much the whole year. There wasn’t at a point where I was up and then I fell, just pretty much slowly behind and didn’t make much momentum. I did come back during September, October, or November when we had a market recovery, I participated, but not enough to get ahead. It was fun.

Austin Wilson:

It’s always fun.

Josh Robb:

Again, that was just more of a thing I’ve always joked about, loving tickers that are creatively named and it was a way to invest in them without any risk because it was fake money.

Austin Wilson:

Absolutely.

Josh Robb:

I don’t think I would use it as a long-term strategy.

Austin Wilson:

Well, the good news, Josh, is that, so that was a really challenging six month period.

Josh Robb:

It was.

Austin Wilson:

I’m just going to throw this out there, I think 2023 2nd Half Stock Draft, when we do that again this year, it’s going to be challenging, too, so I’m just going to say that.

Josh Robb:

You’re saying challenging, huh?

Austin Wilson:

I’m saying it’s going to be another challenging market environment. Here’s what I’m going to say.

Josh Robb:

What are you going to say?

Austin Wilson:

First of all, JoshHunter100, congrats. You did a great job. Again, don’t forget to get ahold of us, hello@theinvesteddads.com and we’ll we hook you up with some swag. Number two, stay tuned, which is another reason to subscribe, and follow us on social media and all these things because we’re doing this again later this year, 2023, middle of the year, so be thinking in June, we’ll be coming out with an episode with some details of how to enter. It should be similar, I’m guessing, to the way we did it this year-

Josh Robb:

We always tweak it a little bit.

Austin Wilson:

… again, locking down on a couple rules maybe, but it should be similarly done. It’s easy to do with everyone on Investopedia, easy to keep track of, we love it. Stay tuned for this year’s competition, the 2023, which, if you count our first one, is actually going to be our fourth one, so it’s coming, we’re getting there. Stay tuned for this year’s competition and how you can be sure to participate in that this year. Thank you for listening, thanks for being here this week. Remember, if you had anyone asking, “Hey, what happened to that Stock Draft,” you can share this episode with them.

Josh Robb:

That’s right.

Austin Wilson:

Send them the link and they would be able to listen to that. Again, subscribe and leave us a review on Apple Podcasts or Spotify if we were of some value or if you just enjoy what we’re doing. Until next Thursday, have a great week.

Josh Robb:

Talk to you later.

Austin Wilson:

Bye.

Thank you for listening to The Invested Dads Podcast. This episode has ended, but your journey towards a better financial future doesn’t have to. Head over to theinvesteddads.com to access all the links and resources mentioned in today’s show. If you enjoyed this episode and we had a positive impact on your life, leave us a review, click subscribe, and don’t miss the next episode. Josh Robb and Austin Wilson work for Hixon Zuercher Capital Management. All opinions expressed by Josh, Austin, or any podcast guest are solely their own opinions and do not reflect the opinions of Hixon Zuercher Capital Management.

This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Hixon Zuercher Capital Management may maintain positions in the securities discussed in this podcast. There is no guarantee that the statements, opinions, or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses, which would reduce returns. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.