2025 Investment learnings

This long post is a collection of my best and worst financial moves in the past year. Mostly to remember what worked, what didn’t, and why. While this contains a lot of financial advice, consider it addressed only to my future self. I don’t assume any responsibility for creative ways you’ll lose your money.

Framework

• Investment: buying something that produces value. In French we have this term “entreprise,” which we translate as “company,” but it also applies more generally to any action undertaken with a productive objective. A few hundred years ago, sending a ship from Europe filled with settlers to bring back treasures from the Americas could be a very lucrative “entreprise.” Today this might be as simple as buying shares in a company, or an apartment to rent out.

• Trade: taking advantage of knowledge others don’t have. It could be a counterintuitive fact or a line of reasoning that you’ve taken further than others. For example, understanding that demand for uranium will be higher tomorrow while the price is unfairly low today, and buying a lot of it.

• Gambling: if you take exposure to something that doesn’t produce anything and you don’t know something others ignore, you’re simply increasing the unknown, also known as gambling.

The line between the three can be blurry, but the intent matters. I try to avoid gambling by ensuring I can explain the cash flow or the edge. My process could be summarized in 3 simple steps:

1. Discovering a thesis
2. Validating it with this framework
3. Implementing it

This has worked out pretty well but has a major drawback: management of existing allocations. This is something I will try to improve.

Interesting moves

Advanced short strategy (Crypto.com)

I’ll start with this one because it’s probably where I learned the most since it didn’t go as planned and I lost money. Crypto.com is a crypto exchange known for providing debit cards with great perks. Probably the best perks you can get in Europe: cashback, lounge access, travel discounts, etc. The tradeoff is that you have to hold a lot of their token for a fixed period. If its price goes down, you’ll lose much more than the few benefits they gave you.

What’s interesting is that shorting their token isn’t very expensive. In fact, it costs less than the yield paid by the platform on the staked amount. This means that rather than exposing yourself to Cronos, you can stay exposed to something like bitcoin, borrow Cronos, and use it to enjoy the benefits. If the token goes up, you can unstake and repay the loan, pocketing the difference in yield, and if the token goes down, you’ve enjoyed the perks without losing anything.

It seemed like an elegant way to put my Bitcoin to work, which I could hardly get yield on. This worked quite well until Trump Media Group announced their investment of $6.42 Billion to create a CRO Digital Asset Treasury. Even though the strategy was supposed to work if the price rose, I didn’t expect it to rise that much. Keeping the short was no longer reasonable (too much bitcoin on a single platform). So I decided to close half of the short and keep half exposure to the token until the end of the stake period (one month later).

Despite losing money since then (the token has gone down again), I think it was still a decent decision with the information I had. Restrospectively I would do things slightly differently. Rather than closing half the short, I would have closed just enough so that if the price kept increasing (let’s say x2 again), the profit I would have made would have been a very good price for the risk of centralizing my collateral. Basically I would have better balanced the expected value of the two scenarios.

Lessons:

• It’s okay to take a small loss to avoid a catastrophic one.
• Always prepare alternatives. I should have planned several other platforms for shorts.
• Be careful with fixed-length investments, especially with borrowed assets.
• When unsure, estimate the distribution of outcomes and just prevent the problematic ones.

Hedging an airdrop

I was lucky enough to receive a few airdrops, and I was surprised by the irrational behavior of some people in the same situation. These were sometimes substantial amounts, but some people seemed to treat them with much less respect than money they had worked hard for. This manifested in two ways:

• The first, most obvious, was using it for gambling. It seems hard to believe but the number of people who lost their airdrop in perps or shitcoins is staggering. I might even underestimate it given that gamblers tend not to talk about their losses.
• The second, much more insidious, was doing nothing. Or in other words, choosing to stay exposed to their airdrop token. Not out of love for the project, but out of fear of making the wrong decision. It’s a bias. Don’t keep your WrappedQuantumAiDogecoin if given the same amount in dollars you wouldn’t invest it exactly there. “Would I buy that token I was airdropped if that money was sitting on my bank account?”

The psychological side isn’t negligible. Here are some heuristics:

• Keeping an airdrop is generally a bad idea
• The sooner you sell, the better. If vested, short it to hedge the unvested portion.
• On launch day, don’t look at the price, sell at a few pre-chosen time intervals
• It’s fine to keep a small part (≈10%) so you don’t feel awful if it performs well

Buying an apartment (loan)

This year I bought an apartment. It was a really interesting investment, which ultimately is very similar to the crypto.com strategy: allocating capital to derive “non-fungible” privileges from it. I think a trap would have been to consider this purchase as a normal investment, trying to get the best deal on impersonal metrics (if I rented it out, how much could I get, etc). The thing is, I’m the one living in this apartment.

I instead tried to exploit this personal side to the maximum. The weirder you are, the better: maybe something you like (for example having few rooms, but large ones) is a flaw for others. It’s as if you could buy Apple stock at the same price as everyone else, but it paid you twice as much in dividends, just for you.

The main reason I bought my primary residence is fiscal. The Portuguese government simply eliminated the purchase tax for young people, and since I live in it, there’s no tax on resale either. This is just extraordinary. The alternative to buying is renting, but the state takes 30% tax on your rent. This means that if you pay 1500 euros to your landlord, they only provide you this service for 1000 euros. If you become your own landlord your budget immediately increases by 50%.

Combined with a mortgage, this becomes magical. In Europe, real estate loans are derived from Euribor, which reflects interest rates, themselves based on inflation, which is underestimated by the central bank to lighten the debt burden of states. If it works for states, it works for me too. Even if I didn’t pay back my debt (which unfortunately doesn’t seem feasible for real estate loans), my apartment would appreciate faster than my debt would increase, basically meaning I would get paid to live here.

Combining these 3 points lead to the easiest financial decision in the world:

• I found an apartment where I would enjoy living very much.
• The bank offers me to pay them a small “rent” every month for X years for this apartment. A fraction of this “rent” repays the loan, the other just pays the bank.
• If I want to move, I’ll sell the apartment for more than what’s left to pay and in fact, also for anything I’ve ever paid (mainly because real estate will have appreciated)

Other tips / notes / thoughts:

• Buying an apartment is one of the only ways to take advantage of these underestimated rates: most collaterized loans (lombard) are expensive
• Buying when rates are “high” is great because few people do it, so the price is lower
• You can fix rates when they’re low, allowing you to benefit even more from inflation
• The perfect is the enemy of the good. Searching for a “better” deal has mostly downsides.

Trading Uranium

This is one of the few trades I made this year. I saw this graph, shared by Elon Musk.

It got me thinking. China had been increasing its electricity production in a straight line for 25 years and there was no reason it would be different in the coming years. So I looked more generally at each energy source used in China to see if I could find a good investment opportunity.

Among all the options, solar seemed the most promising (its growth over the last years was exponential), but impossible to invest in. Companies that manufacture panels are too efficient at cutting costs, their margins decrease as fast as demand increases, so they’re barely profitable.

Conversely, nuclear seemed too good to be true. 100% of Chinese imports come from a Central Asian company with a monopoly on Kazakhstan’s reserves. It’s the world’s leading exporter, controlling about 30% of the market. This company had excellent metrics: growing revenue, generous dividend, valuation much more reasonable than other companies in the sector, and Kazakhstan is much more stable in my opinion than the US under Trump. No risk of demand collapsing: apart from the Germans, few people are stupid enough to shut down a uranium plant. Once built, it costs almost nothing to operate. Even if we developed cheaper alternatives like thorium, it would take decades before new plants arrive, and we’d continue to operate the old ones and build projects already started. Similarly, there’s no pressure to reduce Kazatomprom’s margins.

So far the bet has proven extremely profitable.

What I take away:

• What matters is revenue growth, not just market growth. Don’t forget to consider supply in supply and demand.
• Have few bets, but quality bets
• Don’t hesitate to invest a significant amount

Buying S&P 500 (lump sum)

This investment is the last on this list because it’s the simplest, but its value lies in its simplicity. For tax reasons I received my year’s money all at once, so I had a lot of cash to place that I chose to invest directly rather than DCA. It was a difficult decision. The US market is criticized, the situation is unstable, valuation multiples are high… but it remains one of the most comfortable places to invest. American companies manage to innovate, whatever their government does, and unlike China, the value created is captured by investors. And if I trust American companies, I am not so sure about their government debt so you would have to pay me a lot to get me to hold dollars.

So I did the only thing to do: I bought at the worst time of the year: just before Trump announced his tariffs. I started with a loss of about 15%.

But despite my poor timing, the market recovered so well that I not only made up my loss but even made a 10% profit.

It’s common knowledge that lump sum is on average more profitable than DCA strategy, but you might think DCA reduces risks. It does: simulating both strategies on historical data yields a lower average loss considering only the worst 5% of scenarios, but I think it’s too expensive. The theoretical maximum loss is also 100% whereas for similar average performance you could simply buy an option and actually cap the loss.

Lessons:

• Prefer lump sum unless it’s truly “all in”
• DCA from cash is just bad. If lump sum is too risky, either DCA from T-Bills or buy an option to cap the downside
• Have a plan, trust the process.

Conclusion

If I had a single thing to learn from this year regarding financial decisions it would be summarized this way:

When in doubt, estimate the possible outcomes. Then make impossible those you don’t like.

My challenge for next year will be allocations. How to judge what percentage to allocate to what? When and how to rebalance? I don’t know yet how but that previous learning will probably play a role.