How I became the World's Most Copied Investor on eToro, Managing $77 Million | With Jeppe Kirk Bonde

Summary

In this episode of the Achieving Alpha podcast, host Steven interviews Yepe Kirk Bond, the world's most copied social investor on the eToro platform. Yepe shares his journey from management consulting to full-time investing, emphasizing his meticulous research process and curiosity as key to his success. With over 23,700 retail investors copying his portfolio and managing up to $77 million, Yepe discusses his strategies for diversification, valuation, and risk management. He also shares insights on the impact of AI and the importance of a long-term perspective, recommending a minimum five-year horizon for investors. The conversation covers the effects of geopolitical tensions and interest rate changes on investment strategies, providing valuable insights for both new and experienced investors.

Takeaways

• 🏆 Yepe Kirk Bond is recognized as the world's most copied social investor on the E Toro platform, with over 23,700 retail investors copying his portfolio and managing up to $77 million of people's money.
• 📈 Yepe has achieved an average annual return of 24% over his 11 years on the E Toro platform, maintaining the top position and attracting a significant following.
• 🎓 Yepe initially pursued a career in politics, earning a bachelor's degree in political science, before shifting his focus to finance and earning a master's degree, which led to a career in management consulting.
• 💼 As a management consultant, Yepe advised large tech companies and banks primarily on valuation, which involved calculating company worth and led to his interest in investing.
• 🌐 Dissatisfied with traditional investment options offered by his pension fund and bank, Yepe conducted extensive research on various investment platforms, ultimately choosing E Toro for his investments.
• 📊 Yepe's investment strategy involves deep research and analysis, valuing companies based on their future potential and the assets they produce, rather than short-term earnings.
• 🤖 Yepe is particularly interested in technology, especially AI and its potential impact across various industries, and has integrated AI considerations into his valuation models for companies.
• 🌟 Yepe emphasizes the importance of having a long-term perspective on investments, suggesting a minimum of a five-year horizon for investors to achieve consistent results and manage volatility.
• 🛣️ Yepe discusses the impact of geopolitical issues and global economic factors, such as interest rates and inflation, on investment strategies and the importance of adapting to these changes.
• 🚢 The shipping industry's challenges, including oversupply and geopolitical tensions, are mentioned, highlighting the need for careful forecasting and strategic decision-making in various sectors.

Q & A

What was the initial reason for Yepe to start investing on eToro?

Yepe started investing on eToro because he was unimpressed with the limited diversification and high fees offered by his company's pension fund and bank. He conducted a thorough analysis of various investment platforms and found eToro to be the most suitable for his needs.

How did Yepe's investment journey on eToro lead to him quitting his management consulting job?

As Yepe's investments on eToro performed exceptionally well, more people, including friends and family, started copying his investment strategies. This growing influence and success on the platform eventually led him to quit his management consulting job in 2018 to focus solely on managing his investment portfolio on eToro.

What is the significance of being the 'most copied' investor on eToro?

Being the most copied investor on eToro signifies that Yepe's investment strategies are highly regarded by other users. His portfolio is followed and replicated by a large number of retail investors, indicating that his approach is considered successful and trustworthy within the eToro community.

What is the minimum time horizon Yepe recommends for people copying his portfolio?

Yepe recommends a minimum time horizon of at least five years for those copying his portfolio. This is to account for the volatility of stock markets and to ensure that investors are not negatively affected by short-term fluctuations.

How does Yepe approach portfolio allocation and diversification?

Yepe approaches portfolio allocation by considering a multitude of factors and weighing their importance without adhering to fixed rules. He aims for a diversified portfolio, spreading investments geographically and across industries, while also considering his own risk appetite and the potential risks and rewards of each investment.

What is Yepe's view on investing in bonds compared to stocks?

Yepe prefers investing in stocks over bonds, given that the interest rates on bonds are generally low compared to the potential profits from well-performing companies. He believes that stocks offer higher returns over the long term, especially when fundamental analysis is applied to select quality companies.

How does Yepe incorporate AI into his investment strategy?

AI is a significant component of Yepe's portfolio, both in companies that are directly involved in AI development and those that stand to benefit from AI advancements. He evaluates the potential impact of AI on all companies within his portfolio, considering how different levels of AI development could influence their future performance.

What is the key to Yepe's success in stock valuation?

The key to Yepe's success in stock valuation lies in his ability to assign numerical values to both quantitative and qualitative factors. He turns subjective assessments into numbers that can be analyzed and compared, allowing him to make informed decisions about which companies offer the best value.

How does Yepe decide when to take profits or make changes to his portfolio?

Yepe does not make decisions based on whether a stock is at a profit or loss. Instead, he evaluates the current value of the company against its price, considering changes in valuation and market conditions. If a company's stock price has increased without a corresponding increase in value, or if new information changes his view of the company's future prospects, that may prompt him to make changes to his portfolio.

What is Yepe's perspective on the current interest rate environment and its impact on investments?

Yepe views the current interest rate environment as historically average, noting that real interest rates have been lower than the average of about 5% seen in past centuries. He suggests that the impact of interest rates on investments depends on the expectations for the future, with high interest rates potentially penalizing companies that are not yet profitable or are heavily indebted.