I’ve obviously been very, very lucky. Of the 19 stocks I’ve bought for the past 5 years, 13 was profitable. The top 6 most profitable stocks returned a combined profit of $22 236, while the top 6 biggest losses only cost me a total of $843. The one biggest investment (Paradox Interactive) made up 80% of my total profits.
Total investment
kr 190 443
Total profit
kr 199 261
5 year return
5 year OBX Index
Biggest win: Paradox Interactive
kr 161 375
Biggest loss: Norsk Hydro
kr 4146
Top 6 investments
Paradox Interactive
Apple
Nvidia
Games Workshop Group
Weifa
Bottom 6 investments
Norsk Hydro
AF Gruppen
Nordic Semiconductor
Thin Films
Lockheed Martin
XXL
Biggest mistake
Trying to “diversify” my portfolio by buying several big, traditional Norwegian stocks like Norsk Hydro, AF Gruppen and Orkla. A diversified portfolio strives to reduce loss while giving a decent return. Just buying a random bunch of big “safe” companies is not good diversification, nor can any company be considered “safe”. To do that properly, I should have followed a strategy, like Ray Dalio’s All Weather portfolio. As it turned out, my biggest loss over the past 5 years is Norsk Hydro, meant to be my most boring and safest bet, ending up at -20% even after buying several times at lower valuations.
Best decision
Changing my strategy from the misguided “diversification”, and cutting my portfolio to only 1-3 stocks. I didn’t know anything about those big companies I bought, barely what they sold. I had no idea how different news affected them, and that made me unable to react to anything. When focusing on just a few select companies I actually thought were interesting and knew a little about, I was in a much better position to make decisions.
On Paradox Interactive
The above decision made me trust my instinct and going almost all-in on Paradox Interactive after my initial research on them, and then keep buying it even as the valuation grew.
I first became aware of Paradox after playing some of their games, and noticing their clever expansion pack strategy that could make hardcore players spend between 100-200$ on each game. They had a good selection of titles, and I enjoyed several of them myself. Paradox bought some interesting companies, and was also a publisher of games, not just a producer. They were for example the chosen partner for the highly successful Cities: Skylines.
When I saw they were valued at roughly the same price as Funcom, the norwegian game studio behind the hyped Conan Exiles, I sensed an opportunity and started to dig a little deeper.
I got lucky on this bet, and it ended up making 80% of my total profit.
