Timothy Pereira

I've been investing for 9 years. Since then my portfolio has grown by a compound annual growth rate of 25% (as of year-end 2010 in Canadian Dollar terms - in US Dollar terms the CAGR is 33%). From 2003 to mid-2005 my portfolio was weighted largely in gold mining investments. I then switched into Chinese equities. Both of these macro strategies payed off and have contributed to the bulk of my returns. My current area of focus includes technology platform companies. I am also heavily tilted to the internet and emerging markets. From 2003 to mid-2005 my portfolio was weighted largely in gold mining investments. I then switched into Chinese equities. Both of these macro strategies payed off and have contributed to the bulk of my returns. My current area of focus includes technology platform companies. I am also heavily tilted to the internet and emerging markets.

Investment style

I look for companies that lack effective competition. I invest only in stocks I understand well. My current sectors of choice are the internet and personal computers and devices, with a focus on companies that build dominant or increasingly popular platforms. A platform in this sense is something that has a critical mass of users that depend on it and can't easily switch (network effects). As you can see from my returns, this strategy brings big swings* in the performance of the portfolio, but in the medium to longer term the returns are substantially higher than the market. *2008's poor performance was caused in greater part by my misreading how global financial markets would react to the US housing bubble collapse and recession than by my ability to perform at the underlying strategy. It was a massive failure. However, my strategy resulted in a complete rebound in less than 1 year. I expect that what I have learned from that year will reduce the probability of such a large hit from exposure to a future stock market collapse.

How I got started

In 2002, during the height of the bear market, I was concerned about the performance of my mother's investment portfolio and managed to convince her to let me clean out it out. After a brief period of holding blue-chips and oil companies I bought into mostly gold mining companies. Making some accurate investment and macro-economic decisions while following the stock picks of an investment newsletter writer (Steven Saville) gave me great returns and thus the confidence to want to continue and to improve. As I began to move away from mining equities and make my own stock choices I was protected by the rising tide of the bull market, keeping me confident and making it so that I didn't have to pay too steep a price for my mistakes.