Portfolio Review #2

By Disguycrypto | Portfolio Review | 13 Nov 2023

Hey guys,

we are happy to publish our second portfolio review..

While we tried to provide you with a different risk level this time around, the investor adjusted his/her risk level to high instead of medium. We will look for a different risk level during the next portfolio review, so if you are a trader with a low-medium risk level make sure to sign up here: https://t.co/dLgHmC5bMz

Before we get started, we would like to remind you, that this review and activity is not financial advice; it is for information purposes only. And coins mentioned in the review are no indication of our current holdings or opinions towards certain coins.

For our second portfolio review, we decided to look at a bigger portfolio with a value of $25000 currently holding 11 tokens. The person would like to position himself for a fast-growing portfolio and take medium-high risk.

Our approach was as follows, we judged the portfolio on its holdings, diversifications and capital allocation. Additionally, we took into consideration the risk level of the individual.

The structure of the review will look as follows:

1. Portfolio Analysis

a. Portfolio Capital Allocation

b. Portfolio Category Capital Allocation

2. Strategy Alignment

3. Opportunity for change

So let's get started:

Portfolio Analysis

Portfolio Capital Allocation

The portfolio currently holds 11 tokens with the following allocation:

$RLB 35%, $KUJI 27,17%, $PEAR 9,19%, $PAAL 8,29%, $CBY 5,89%, $HILO 4,20%, $HERA 3,70%, $PERPS 2,90%, $CROWN 1,70%, $ATOR 1,00%, $DUBBZ 1,00%

So let’s first talk about the value allocation, considering his strategy, of trying to achieve a fast-growing portfolio. The allocation of mid-large caps is close to 62% with 35% $RLB and 27% of Kuji, this does not align with the current strategic objective. For example, $RLB already sits at a relatively large market cap of 776 million, and while $RLB is a great project, it could likely be outperformed by other assets. Meaning, that while for instance $RLB is only 6,5x away from a $5 billion market cap, $DUBBZ for instance still requires close to 13x to just reach a market cap of $500 million. Of course, a rearrangement comes with additional risk, but due to the investor’s risk profile, this might be worth consideration, therefore bringing us to the first opportunity of the portfolio.

Additionally, we can see that holdings like $DUBBZ, $ATOR and $CROWN are only between 1–2%, while diversification is the key, being too diversified can also have repercussions, especially with smaller holding amounts. The fees in a bull market can eliminate most of the profits from the smaller positions when not held on an exchange.

Portfolio Category Capital Allocation

This was a quick take on allocation, disregarding any other categories, therefore let us now dive into the portfolio, when separated into categories.

As seen in the screenshots below, the portfolio is split into #GamblFi, #DeFi, #AI, #RWA, #SocialFi, #GameFi #Privacy.

For clarification purposes, we categorized $CROWN as a #GameFi token for now, as the betting aspect is not yet too prominent on the platform itself.

Now let’s discuss the two charts, the chart on the left, highlights the coins themselves, not considering the allocated capital. The chart on the right is adjusted to the allocated capital. The allocation of the portfolio is quite large when it comes to #GambleFi and #DeFi while #GameFi and #Privacy are underrepresented in our opinion, and $CROWN doesn’t represent the #GameFi category. Therefore, creating the opportunity, to adjust the allocation with regards to holding categories.

Strategy Alignment

As slightly touched upon, the current strategy of medium-high risk does not align with the portfolio allocation shown above. This is because some of the mid-large caps can be outperformed with lower caps. While usually when a portfolio grows larger investors tend to take less riskier investments as they are satisfied with current returns. However, this portfolio reflects the same behavior even though it has a different strategic approach. For having a high-risk portfolio some new allocations could be considered.

Opportunity for change

1. As mentioned above, the first point to consider is to reduce the allocation from mid-large caps as they cover 62% of the current portfolio and do not align with current risk level of the investor.

2. Considering the opportunity in point 1, we can re-allocate the capital from mid-large caps into some low caps such as $DUBBZ for #GambleFI representing the same category as $RLB but with only 1/20 of the market capitalization representing an opportunity for growth.

3. Thirdly the allocations of amounts around 1% should be considered and looked at, and perhaps allocated to already existing holdings or sized up to have a large holding percentage. Never forget the $ETH fees can go up to over three to four figures and more in a bull market.

4. The fourth and last point brings us to the category allocation, as previously mentioned, we are missing some exposure to the #GameFi sector and #Privacy both are not represented in any major holding. Some possibilities are $OTK $GMEE $EPIK $ATOR

And remember, these opportunities don`t have to be implemented instantly, you can slowly add on dips, adjust your holdings after conducting further research etc.

This was our second portfolio review, we hope you enjoyed the format. And please remember, that this review and activity is not financial advice; it is for information purposes only. And coins mentioned in the review are no indication of our current holdings or opinion towards certain coins.

If you would like to be part in the second review make sure to follow @cryptojohnnyfap and @Disguycrypto and sign up through the following form link: https://forms.gle/Wy2ewt35xzZtdJav8