My Value Investing Performance in 2025

Key Concepts

• Value Investing: An investment strategy focused on acquiring undervalued assets with a margin of safety to minimize risk of loss.
• P/E Ratio (P Ratio): Price-to-Earnings ratio, a valuation metric comparing a company’s stock price to its earnings per share.
• Margin of Safety: The difference between the intrinsic value of an asset and its market price, providing a buffer against errors in valuation or adverse events.
• Dividend Yield: The annual dividend payment expressed as a percentage of the stock's price.
• Psychology of Investing: The emotional and mental factors influencing investment decisions.
• Compounding: The process of generating returns on an initial investment and subsequent earnings.

Value Investing: A 2025 Performance Review & Philosophy

This discussion centers around a value investor’s perspective on market performance, specifically reviewing a 2025 portfolio result of 23% (measured in Euros) and outlining the core principles guiding this investment approach. The speaker emphasizes that value investing prioritizes capital preservation above rapid gains, a point often misunderstood by those focused on “bull runs” and quick profits.

The Core Tenets of Value Investing

The speaker defines value investing as fundamentally about not losing money before seeking returns. This is achieved by focusing on investments with a significant margin of safety and a clear driver of return. He illustrates this with a specific example: a stock with a P/E ratio of nine, an 80% cash position, and 10% growth. This combination, he argues, is “very powerful” because it balances risk mitigation with potential upside. The emphasis on cash (80%) is a key component of the margin of safety, providing flexibility and resilience during market downturns.

2025 Portfolio Performance & Context

Despite “gloom and doom” commentary, the speaker’s portfolio achieved a 23% return in 2025 (in Euros). He acknowledges underperformance compared to gold and clarifies that a dollar-denominated return would be slightly lower due to currency fluctuations. This performance is presented not as a boast, but as evidence that a value-focused strategy can generate positive returns, even in challenging market conditions. He specifically mentions a 5% dividend yield as a consistent driver of return within his portfolio.

The Importance of Psychological Alignment

A significant portion of the discussion revolves around the psychology of investing and the type of client attracted by different investment narratives. The speaker explains a deliberate shift in his communication style. Previously, he could have highlighted potential for 5x or 10x gains, but found this attracted impatient investors who reacted negatively when those gains didn’t materialize quickly. He states, “I could easily be saying that my top portfolio position has a 5x potential… but I don't know when that growth will materialize.” This led to negative feedback and a misalignment with his core investment philosophy.

He contrasts this with the current situation, where he attracts “amazing clients” through a more “boring” and realistic approach. He believes his research platform now hosts a community of genuinely aligned value investors, stating, “I think that there are better value investors on my research platform that I am.” This highlights the importance of finding like-minded individuals who share a long-term perspective.

Contrasting Investment Philosophies

The speaker draws a clear distinction between two investment approaches: chasing stocks based on momentum (“People are chasing stocks that go up. Doesn't matter what they're buying as long as it's going up.”) versus building a portfolio based on fundamentals (“building portfolio fundamentals, earnings, dividends, growth in earnings, business earnings potential for the future”). He argues that the latter, while slower and less exciting, delivers more consistent results over time. He acknowledges that losing years are inevitable ("I can promise you losing years"), but emphasizes that this is acceptable within a long-term compounding strategy.

The Long-Term Perspective & Compounding

The speaker advocates for a long-term investment horizon (10-15 years) and emphasizes the power of compounding. He frames his approach as a method for wealth accumulation over decades, rather than a get-rich-quick scheme. He notes that his current research platform is entering its eighth year and has a strong base of “happy customers.” He concludes with a wish for a happy new year and a call to continue “compounding for the next few decades.”

Call to Action

The speaker concludes with a promotional message for his research platform, offering a 21-day money-back guarantee. He positions the platform as a resource for investors seeking to implement a value-focused strategy and protect their capital.

Notable Quote:

“Value investing always be ready for the worst case scenario. That’s completely correct. Less profit in general.” – The speaker, emphasizing the risk-averse nature of value investing.

Technical Terms Explained:

• Intrinsic Value: The true, underlying value of an asset, based on its fundamentals and future cash flows.
• Compounding: The process where earnings from an investment generate further earnings, leading to exponential growth over time.
• P/E Ratio (Price-to-Earnings Ratio): A valuation ratio of a company’s stock price to its earnings per share. A lower P/E ratio generally suggests a stock is undervalued.