2 Stocks From My Portfolio + 8 Years of Performance!

Key Concepts

• Compounding Research: The philosophy that deep, consistent analysis of businesses leads to better investment outcomes over time.
• Margin of Safety: An investment principle where an investor only purchases securities when their market price is significantly below their intrinsic value, minimizing the risk of capital loss.
• Return on Equity (ROE): A measure of financial performance calculated by dividing net income by shareholders' equity; the speaker targets companies with high ROE (around 20%).
• Catalyst-Driven Investing: Seeking specific events or market conditions that will unlock value in a company.
• Portfolio Inflection: The strategic timing of building positions in anticipation of long-term industry shifts (e.g., oil market cycles).

1. Performance Overview and Evolution

The speaker reflects on eight years of managing a model portfolio, noting a significant evolution in his investment methodology.

• Performance Metrics: The portfolio has achieved an annualized return of 15.6%, surpassing the initial target of 10–15%.
• Growth Trajectory: Performance improved significantly after 2022. The annualized return prior to August 2022 was 14.5%; the subsequent period has pushed the overall average to 15.6%, indicating that the speaker’s refined research process is yielding better results.
• Capital Structure: The portfolio began with a $10,000 initial investment and $1,000 monthly additions (later adjusted to $5,000 start and $250 monthly additions). The current value stands at approximately $58,112.

2. Investment Strategy and Methodology

The speaker emphasizes that his strategy is not about chasing market trends but about acting as a business owner.

• Selection Criteria: He looks for businesses that offer a return of 10% or more. Key metrics include:
  • P/E Ratios: Targeting 9–10.
  • Growth: 10–15% growth rates.
  • ROE: ~20%.
  • Price-to-Book (P/B): Often targeting 0.8 or lower.
• The "Owner" Mindset: The speaker avoids buying "cheap stocks that can get cheaper." Instead, he focuses on businesses with a margin of safety that allows for compounding regardless of market volatility.
• Research Process: He tracks over 50 companies across various sectors. When a company meets his value criteria, he conducts a deep dive to determine if it fits the portfolio.

3. Real-World Examples and Case Studies

• Oil Exposure: The speaker identified a 10% dividend yield opportunity in a Norwegian oil company. The strategy was to build a 15–20% position over several years (2026–2027) to capitalize on an expected market inflection in 2028–2029. He uses dividends to reinvest and slowly scale the position.
• Swiss Mountain Resort (Titlis): An example of a niche, small-business investment. The company is investing in new infrastructure to increase visitor capacity, which the speaker views as "owning a piece of Switzerland."
• Historical Lessons: The speaker admits his early years (2018–2020) were characterized by a lack of focus, citing high cash positions (55%) and speculative bets in Russia, Brazil, and Argentina. He notes that he sold his Russian holdings immediately upon observing the initial military movements toward Ukraine, demonstrating a reactive risk-management approach.

4. Key Arguments and Philosophy

• Outperformance vs. Absolute Return: The speaker argues that he is not obsessed with beating the S&P 500. His primary goal is to achieve a consistent 15% return. If the market returns 20% while he returns 15%, he remains satisfied as long as his strategy remains intact.
• The Value of Patience: He stresses that research compounds over time. The "terrible start" in the first four years was a learning curve, and he expects his current self to look back at his current decisions in eight years and identify further areas for improvement.
• Risk Management: The current portfolio includes a key position with 75% cash-to-capital, providing a buffer against market downturns and potential for future deployment.

5. Synthesis and Conclusion

The speaker concludes that his success is a result of moving away from speculative, diversified bets toward a concentrated, research-heavy approach. By focusing on companies with strong fundamentals (high ROE, low P/B) and waiting for the right catalysts, he has successfully increased his annualized returns. He maintains that the most important factor is the compounding of knowledge, which allows him to make better decisions over time. He remains committed to transparency and long-term value creation, inviting investors to join his research platform with a fixed-price guarantee.