Czech Investor Beats Reality TV: Top 10 Global Reader

Investing is no longer just the domain of Wall Street professionals. Today, thousands of people also follow specific investors on the investment platforms Trading 212, ZuluTrade and eToro. One of the most successful is also Dan Hamerník, known by the nickname Smudliczek, which he uses both on eTor and on the social network X, from where he gets some of his inspiration and information.

After just a few minutes of conversation, it is clear that investing for him is not just a job or a way of making a living, but a real passion. “Someone watches various reality shows in the evening, I prefer to sit down and study company statements, listen to conference calls with investors and follow geopolitics. I need to know what is happening in the world and how it can affect business,” he says in an interview for Seznam Zprávy.

In the Czech Republic, he is the most copied investor and globally he is in the top ten of approximately four thousand investors whose strategies can be copied on eTor. Today, his strategy is repeated by approximately 9.5 thousand people, and the amount of capital “connected” to him exceeds 30 million dollars.

Copying in practice means that retail investors can automatically imitate his portfolio. When a Hamerník buys or sells a share, the same trade is carried out on their accounts in proportion to their deposit.

He has had experience with the world of investments since 2014, but then in a passive way – for example through mutual funds. He started actively investing in individual stocks in July 2019. Since then, he has achieved an annualized return of around 29 percent, while over the past two years he has appreciated the portfolio by roughly 160 percent.

At the same time, it outperforms the S&P 500 index, the basic measure of the US stock market’s performance, by approximately 12 percentage points per year, with less volatility than the index itself. In other words, higher returns are not achieved at the cost of extreme risk or wild swings, but rather through disciplined risk management.

But his journey was certainly not painless – the worst period was 2022, when his portfolio fell by 36 percent. At the same time, it was Hamerník’s only losing year. At the time, the markets were suffocated by inflation, high interest rates, fears of a recession and the war in Ukraine, and the decline, albeit milder, also affected the broader American index.

The turnaround was all the more significant last year, when Hamerník’s portfolio grew by 80 percent and this year is approximately nine percent in the plus. Nevertheless, he warns that investing is not without emotions and big fluctuations. “I personally can handle even minus twenty or minus fifty percent, if I still believe that the original idea is valid. It is always important to know why one has those positions,” says the 31-year-old investor.

“It takes me a long time to even form that opinion. And once I have it, I need really strong arguments to change it. Whether the investment thesis is correct will always become clear over time anyway. If the position is at a loss, but the reasons why I entered it are still valid, I am able to buy the same stock gradually at a lower price,” he adds.

His style is a combination of active portfolio management and long-term holding of winning positions, with statistically approximately eight out of ten trades ending in profit. His average earnings are about six times the average loss, and he holds a typical investment for about 14.5 months.

At the same time, Hamerník did not come to the world of investments as a “financial professional”. He studied IT in Pardubice, and it was only dissatisfaction with the results of traditional products that led him to invest on his own. At the same time, his first purchases were not “textbook”. In his youth, he played a lot of computer games, so one of the first shares was Nvidia – a company whose graphics cards he knew well as a gamer.

“Twice I sold the shares very early, saying that they are simply expensive and that it makes sense to take the profit. And in retrospect, I think that if you had held it for a long time and not let yourself be thrown out of position by emotions, you would be better off today,” he admits.

It is clear from the interview that Hamerník does not associate his success with one clever trick. Rather, he talks about investing as long-term work and discipline. The basis of his approach is the so-called investment thesis – a simple “why”: why own the given company, what is its competitive advantage.

“It’s not enough for me that the stock is cheap. I need to know why I want to hold it. What’s the story, what does it have to pay to make it work – and most importantly, what would have to happen for me to say: I was wrong here,” he explains. But the road to such a thesis is not fast. When he gets a new idea, he talks about 100 to 150 hours of pure analysis time.

Hamerník repeatedly listens to calls within the results seasons, reads presentations, compares management’s promises with reality and looks for arguments against. “When there is a short report, I’m interested in what exactly the company blames. Because there you often come across things that others don’t want to hear, but you want to hear,” he explains.

So-called short reports are analyzes of investors who bet on a drop in the share price and draw attention to possible risks or weaknesses of the company. For Hamerník, one of the most important filters is management, i.e. whether the company fulfills what it promises and whether it communicates clearly. When the company’s story bends to suit the situation, he takes it as a warning.

He also claims that he tries to avoid anything that would make investing into a casino. Therefore, he does not use financial leverage, derivatives, which the famous investor Warren Buffett refers to as weapons of mass destruction, and he does not even speculate on stock declines. In short, he chooses companies he trusts and bets on them with a longer horizon. “For me, what’s more important than the maximum return is often how much risk I’m taking on it,” he explains.

From the outside, Hamernik’s portfolio looks like a mix of the big themes of recent years – artificial intelligence, defense, energy, and a lot of China. But the investor claims that these are often not isolated bets, but rather different parts of one broader idea. For AI, he rejects the simple shortcut of “I’ll buy Nvidia and that’s it.”

For him, infrastructure and supply chains are mainly interesting for investment in AI: data centers, cooling, electricity, cables or memories.

This gives him access to one of the largest current positions in his portfolio, namely Samsung Electronics. He built the position gradually and bought more “month after month” if his thesis did not change. In his eyes, Samsung is not primarily a “telephone company”, but a key player in memories and at the same time in the production of chips for other companies.

“Samsung has not yet said the last word, at least from the point of view of price and profitability,” he is clear. It is with the most successful positions that it can be seen that Hamerník does not let the portfolio grow on its own without control. Some defense and industrial titles have grown significantly for him, and thus their weight in the portfolio has also increased. But the investor says he doesn’t want one position to dominate.

“I have a limit that I don’t want one stock to be more than 25 percent of the portfolio. With Rheinmetall, I already had to sell a part because it grew so much for me that it was already too concentrated. I don’t want one stock to decide for me whether the year will be good or bad,” he explains.

It is Rheinmetall that is one of his most successful investments – it has gained roughly 370 percent since the purchase, and even after a partial sale, it remains the largest position in the portfolio with a weight of approximately ten percent. The second biggest bet is the aforementioned Samsung, which has a roughly seven percent share.

However, investing also includes opposite stories. In addition to winning positions, Hamerník also has several losing titles with smaller weights in his portfolio. For example, PayPal is currently about 32 percent in the red, but they still believe in the company. In Hamerník’s portfolio, some Russian titles are also “stuck” deep in the red as a reminder that he misjudged the beginning of the conflict in Ukraine.

Today, financial markets are often moved not only by numbers from the economy, but also by politics – and sometimes one statement, a post on a social network or an announcement is enough to rewrite the prices of shares, bonds and currencies within minutes. American President Donald Trump is a specific figure for investors in this regard, because sometimes it is difficult to distinguish what is just rhetoric and what actually turns into concrete steps.

Nevertheless, Hamerník says that he perceives the current environment “readably”, even though he is also prepared for sharper price movements. He looked back at Trump’s first term in the White House, read about his approach to business and tried to guess what might be coming. “To me, Trump is extremely readable, and that’s what made me successful last year,” he says.

He’s careful about the money, but admits to a major milestone – last year was the first year that the sum of his investment income exceeded what he normally earned in IT. He is still operating as a sole trader, although he is cutting back on work.

And what next? Hamerník receives various offers on a regular basis, including to start his own investment fund. “I’ve turned them all down so far,” he says. According to him, the fund does not attract him because of the regulation and licenses, but also because it would be a completely different type of work. Instead, he is more interested in improving the return-to-risk ratio in the long term and standing up even when the next crisis comes.