A Long Way From Omaha

Well, pull up a chair and let me open a Cherry Coke, because we have a lot to talk about here. When people ask me for investing advice, I usually tell them to put their money in a low-cost S&P 500 index fund and get back to work. I always say, "Never bet against America." Looking at this portfolio, it seems you heard that, nodded politely, and then booked a one-way ticket to literally everywhere else on the globe.

Charlie Munger—God bless him—would probably take one look at this and call it "rat poison," but I’ll try to be a bit more diplomatic. You've built a portfolio that reads like a travelogue for a very adventurous, somewhat reckless backpacker. It takes courage to step outside the herd, but courage without a margin of safety is just foolishness. Let's look under the hood and see if there are any real businesses generating real cash, or if you're just paying a premium to ride the rollercoaster.

Looking at your geographic exposure, a staggering 95% of your capital is parked in emerging markets. You’ve practically ignored the developed world entirely! Now, I see you’ve got about 31% of your money in the technology sector and nearly 60% chasing a growth strategy. That makes me nervous. Growth is part of the value equation, but overpaying for growth is how you permanently destroy capital.

You do have an eye for a competitive moat, I'll give you that. I see Taiwan Semiconductor sitting at an 11% weight. It's a marvelous business—truly wonderful—with a massive scale advantage. Berkshire actually owned it briefly, but I decided I preferred capital parked in places with fewer geopolitical headaches. I also notice you’ve got 6% in Nu Holdings. Berkshire threw a few hundred million at that Brazilian bank, so I certainly can't fault your taste there! MercadoLibre also has a beautiful network effect going for it.

However, let's talk about your cash reserves. You are sitting on a measly 4.7% in cash. As I always say, cash is king only when you deploy it, but you need to have it to deploy it! When Mr. Market gets depressed and starts offering you wonderful businesses at bargain prices, you won't have any dry powder to swing the bat. You’re fully invested in some of the most volatile markets on earth with almost no shock absorbers.

🚩 Extreme Geographic Concentration Risk: Betting 95% of your net worth on emerging markets is practically begging for a lesson in macroeconomic humility. Currency fluctuations, unpredictable regulatory environments, and geopolitical tensions are huge risks here. You are demanding a very high rate of return to justify this level of systemic risk, and I'm not convinced you're getting it.

🚩 Over-Diversification and "Diworsification": You have 31% in broad market indexes like your Emerging Markets ETF and India ETF, but then you are simultaneously trying to pick individual winners in those exact same regions (like Alibaba, Reliance, and Infosys). As Charlie and I have said for decades, diversification is protection against ignorance. If you know how to evaluate a business, you don't need the ETF. If you don't, you shouldn't be picking the individual stocks.

🚩 Speculating Instead of Investing: I see over 13% of your portfolio tied up in pure speculation. Take Grab Holdings, for instance. You're buying into a Southeast Asian super-app hoping it eventually figures out how to print cash like a real business. Remember, a wonderful company at a fair price beats a fair company at a wonderful price. Stop paying up for momentum and promises.

🚩 No Dry Powder: With less than 5% in cash, you have zero flexibility. When markets inevitably panic—and emerging markets panic more spectacularly than most—you will be a forced spectator rather than a buyer of distressed assets.

I have to give this portfolio a 4 out of 10. You've identified some fundamentally strong companies with real economic moats, but your portfolio construction lacks any sense of a margin of safety. You've built a house entirely out of high-beta bricks.

Here is what I would suggest you do:

1. Bring Some Capital Home: Introduce a sturdy anchor of US large-cap equities—businesses with predictable, boring earnings that pay you while you sleep.

2. Build Your Cash Buffer: Trim your speculative losers and raise your cash position to at least 10-15%. You want to be the one holding the gold when everyone else is holding the bag.

3. Pick a Lane: Either trust your ability to identify wonderful foreign businesses (like TSMC and Nu) and concentrate your capital there, or admit you don't know who will win and buy the broad ETF. Doing both just dilutes your best ideas.

4. Demand a Margin of Safety: Stop buying growth stories. Look at the free cash flow. If a business isn't producing cash today, be very careful about what you pay for its tomorrow.

Remember what I've always said: Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1. You are taking on an awful lot of risk to make a buck. Invest in what you understand, and demand a price that protects you from your own mistakes.