2022 is shaping up to be one of the toughest years for the markets in history. No strategy is performing well, is there? Throughout the article, I will be taking apart many people who criticized our performance and do not believe that an asymmetric portfolio can perform well in any market situation.

First, let's start by looking at what is happening in other strategies that have historically performed very well and seem to be underperforming in these unusual market conditions.

• Permanent Portfolio (Harry Browne):

• All Seasons (Ray Dalio):

It certainly seems that we are talking about a black swan, no? It seems impossible that they were both positive during 2007 and 2008, and now they are almost -20% so far this year.

There are many factors that most investors do not take into account when investing. The main one is that there are many assets that they think are uncorrelated when in fact, they are not.

We warned last year

During 2020 and 2021, we warned that the market would pay dearly for all the excesses made after the pandemic. In fact, on many occasions, we were too heavy-handed. But anyone with two fingers on the pulse was aware that it was not possible that after having stopped all production and supply lines and that people all over the world stayed at home for more than two months, the economy would not notice.

Yes, the markets fell for three weeks in a very aggressive way. But they were back to their highs in just a couple of months.

Technology companies were trading at multiples of over 1,000 P/E.

Valuations were totally crazy, and we were sure we would face a totally inflationary period. In fact, we continue to be surprised because we think inflation is even low for everything that went wrong.

We talked about buying a house with a mortgage.

We also discussed it was an exceptional time to buy a home with a fixed mortgage on several occasions. We were in a period very similar to the 1970s.

Interest rates were at 0%. Any company/individual could borrow money to invest for free and pay it back later.

When money is priced at 0, it is generally used for the wrong purposes. This has happened historically on many occasions. Always in bull markets.

Obviously, with inflation, the price of materials was going to go up and, therefore, the cost of housing. Moreover, the only way for central banks to stop inflation is by raising rates.

We already warned you that in the 1970s, they doubled the price of housing in just 15-20 years.

Our portfolio.

Here is the track record of how our portfolio has performed over the last year and how the Nasdaq 100 has performed.

How are we doing it? With three very clear premises:

• System: we have a very well-defined system of when to buy and sell at all times. We are clear that we will ALWAYS stick to this system. It is the key to investing well. Even in the most painful moments of the markets is when we have to follow our model closely.

• Learn and adapt: we make mistakes. So do we all. But what we always use is logic in each of our reasoning. When we make a mistake, we adapt our system a little and continue. They should not be very abrupt changes as they could considerably damage our performance.

• Search for the black swan: we use highly uncorrelated assets that give us a positive performance in our portfolio while looking for a black swan. We know that money is made during bear markets, and that is precisely what we are looking for.

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We also show practical tips like the ones we have been telling you throughout the article.

Hug.