Sound Money

Remarkable year! I set myself goals and I met most of them, which is very rewarding. Yet, at the end of the year I feel battered and bruised by the financial experience dealt by markets in 2022. But there is no point in beating myself up about past mistakes. There are a ton of lessons to ensure constructive outcomes in the future. I am living by my principles, doing what I said I was going to do and I have plenty to be grateful for. I am looking forward to 2023.

My relationships, the cornerstone to any healthy life, are in strong shape. Team Zak and Rob are firing and facing up to life’s challenges together. We have lots to figure out, but I love our commitment to honest communication and our desire to experience what life has to teach us. Soon after the passing of our dear grandmother this year, we decided to further open ourselves to life’s elements and test our relationship in a new realm through growing our family. We are expecting our first child in 2023 so next year is probably going to be just as, if not more, remarkable than 2022. I look forward to putting our relationship, principles, patience and so much more to the test in 2023.

There have been times this year where I have felt alone, but on reflection I realise this was a process I needed to work through, rather than a lack of friendship or support. Reading David Whyte’s essay “alone” I understood that I was tiring of the story I had been telling myself. That I needed to inhabit the silence in my own way and digest the experience of 2022. I needed to look mirror, take stock and rest. I needed to let myself alone so that my life became a choice again. Numerous friends and family have reached out through the year. I was just struggling to appreciate the support because I was struggling to know exactly how I felt myself. I was struggling to find a way to communicate how I felt, appropriately with the suitable people. I realise that this is a skill – one that I will need to continue opening up to.

The growth in my relationship with my father is something I am particularly proud of this year. He is a great guy and a loving father. We just have not always communicated as much or as well as we could have in the past. In recent years I have chipped away with prying questions and I feel like we had a few breakthroughs this year. There are a few occasions this year that have really touched my heart. Now our communication is more frequent, collaborative, open and caring. I am ever so proud and grateful for this outcome.

We were fortunate enough to have my parents to visit for 3 weeks, which included a wonderful road trip to Yosemite, San Francisco, Carmel by the Sea and Big Sur in Southern California. It was incredible to have concentrated time with these special people at what feels like a remarkably new stage of all our lives. It is not just the passage of time with its inevitable cycles, but people change over time. I think we need concentrated time with loved ones to “get to know each other again”. The sights, experiences and conversations of this holiday will live long in the memory.

Whenever I conduct these reflections travel comes up high on the enjoyment list and 2022 was no different. I was also lucky enough to travel to the UK to spend time with friends and family. My wife and I also visited Mexico for Dia de los Meurtos which was a breathtaking experience, filled with culture, history, food, sounds, smells and friendly people. My most memorable moment of the year came at sunset in San Miguel de Allende as my wife and I strolled through the cobbled streets at golden hour, snapping a few pregnancy shots with the sound of Mescal Cantina’s and the smells of legit taco tracks and no worry in the world. I cannot wait to go back to Mexico! I need to make sure we continue traveling in some capacity in 2023 – Baja California is calling our name!

Sound Money Capital was founded in September 2021, which is an achievement in of itself. There are many positive messages to tell from 2022: outperformance vs. benchmark, no client redemptions, no write-downs (no exposure to Luna, FTT, etc), and we have received new client inflows through an extremely challenging year. It has hurt to lose clients capital in dollar terms, though. I wish I had done better, and I know I could have done better so it is sobering to think about these missed opportunities. Managing capital within a fully discretionary fund is a step up to managing capital in a large investment institution. There is nowhere to hide, and the markets will humble you quickly in a volatile asset like bitcoin.

My personal finances have unsurprisingly taken a hit with implications to digest. I am not looking for sympathy by saying this. I just think that ‘getting the emotion out’ and fully digesting the consequences are important steps towards fully releasing that pain. What is the other option? Only talk about the positives? Ignore the pain of mistakes and missed opportunities?- I need to take what I can from 2022, apply the learnings and come back unencumbered in 2023 so that I can add more value to clients and myself, and get my financial goals back on track. I have learnt extensively about risk management, trading, investment processes, stress management and myself this year. I cannot wait to apply and compound these lessons next year.

Physically, my body is treating me well at 36. Open-water swimming on Saturday mornings is one of the highlights of my week. Zakeeya and I often sit outside on the beach afterwards as we endeavour to spend more time outdoors. Regular beach and park workouts also get me outside and keep me active. I started boxing in the last couple of months of 2022, which has been a great stress relieving activity and a fun distraction from the grind. It also provides a great contrast to yoga, which has been central to my physical and mental health in recent years. I do not practice yoga as much as I have in the past but I have started teaching, which was another 2022 goal that I accomplished. Teaching brings me great joy, it provides me with motivation to deepen my practice, it asks different questions of me every week and I think there is something unexplainable there that is worth further exploration.

I sat down to write my principles/values in September 2022. While there is always room for improvement, I am proud to say that I am, on the whole, abiding by these principles (truth, honesty, community, independent thought, experiential, humility, mindful, grateful, bravery and kindness). I was probably a little naïve and I did not manage risk as well as I should, but in the words of Frank Sinatra “I did it my way”. This is not to say that “it’s my way or the highway”. But I set out my goals, intentions and values, and I targeted those with vigour. While I must lick my wounds and take the lessons on the chin, I also have to be proud for putting myself out into the elements because I do genuinely believe that good outcomes emerge from repeated application of good principles.

I can see 2023 being a year of refining, consolidating and execution to create more stability for our family. I pushed the boat out for great reasons in 2022 and I am going to get it sailing in 2023. But with a baby arriving in January 2023 the pressures are going to shift towards execution. I would like to live with even less fear and I would like to be kinder to myself when things do not work out as expected. I also need to be less serious and enjoy the fun that every day has to offer. I have enjoyed 2022, but I expect that a child may teach or reteach me a different relationship to fun and love in 2023.- For anyone who has got this far, I would love to receive to your feedback. You probably know me in a different way to how I perceive myself, and certainly have blind-spots. So, I would love to know what you think. What could I be doing differently? What am I missing? What else could I focus on?