The Decade Before I Had a Style

My investing journey, Part 2: 2003 to 2012

Sep 28, 2026 · @Deniz Erkan

In 2003, I was an ambitious young engineer at Microsoft in Seattle, working on SQL Server Enterprise and working very hard. I loved being there. My focus was my career: learning, growing, and working alongside some of the best people in my industry.

Investing was my side project. I was enthusiastic about it, and I always wanted to be in the market, so I opened a Fidelity account and started spending some of my time on it.

What I did not have was a style. I bought things that looked interesting to me, without any particular method. Around me, friends were investing in every way imaginable: macro, micro, global sectors. There were so many styles that I did not know which one was mine. Looking back, the first ten years were an experiment, run with my own money, by someone who did not yet know what he was testing.

The first decade in numbers

Reconstructed time-weighted returns from monthly account balances; S&P 500 price index

The experiment went better than it had any right to. By the end of 2012, a dollar in my account had become $2.27, while a dollar in the S&P 500 had become $1.67. I was ahead in 2005 (+13.8% against +3.0%) and in 2007 (+17.5% against +3.5%). In 2008, I lost 28% while the index lost 38%.

The Nasdaq-100, full of the technology companies I worked among, did better still: its dollar became $2.71. I was not measuring myself against it at the time. I should have been.

Ahead, without knowing why

Here is the uncomfortable truth about those years: I was ahead of the market, and I could not have told you why. I had no stated philosophy, no defined edge and no rule for how much to put into any idea. Some choices worked. I could not have repeated them on purpose.

What changed slowly was my education. I started studying the best investors and how they thought: Peter Lynch, then Warren Buffett and Charlie Munger. I worked through their letters and talks until I had absorbed them, not just read them. One idea stayed with me more than any other: the circle of competence. To me it means understanding exactly where your knowledge begins and where it ends, well enough to know whether it can give you an advantage.

It took years for that idea to become mine. The theory was in place by the end of this decade; the practice was not. Only around 2014 or 2015, when the theory met my work as a builder of technology products, could I say with confidence: this is where my edge is.

In 2009, one more piece arrived. Reading Buffett explain why he had sold long-dated put options on stock indexes during the financial crisis, I realized I had misunderstood options entirely. That began a different study, one I would spend nearly ten years on before I acted on it.

Beating the market before you know why is not an edge. It is a streak.

Next in the series

Part 3, "The Flat Years," is about the four years when I was barely in the market at all, and the hardest period of my life.

Engineered compounding,
Deniz Erkan

Disclosure: This letter describes my personal investment history. Returns are reconstructed estimates from monthly account balances, are not audited, and do not reflect fees or taxes any other investor would pay. Index comparisons use price returns, excluding dividends. This history is separate from the Runtime fund and its algorithmic strategy. Past performance does not predict future results. This is not investment advice.