1. Performance
Over the trailing twelve months, the portfolio is up 10.28% against 12.04% for the S&P 500 (total return).
Year-to-date, 5.08% against 12.79% for the index.
Since inception (2nd of October 2023): 17.1% vs S&P 500 20.98%.
All figures are pretax, net of fees, and exclude the effect of any cash contributions or withdrawals. This is a pure return on capital already at work.
I don’t use options and I’m currently unlevered.
2. Sentiment
Last month, I explained that my sentiment was mainly based on the fact that my year-over-year performance was below that of the index, for several reasons.
In particular, waiting for the turnaround at Atos, which I now think more clearly is happening after its Q3 results.
After some thought, I plan to write an article called “Why am I underperforming / outperforming?” to make the process more systematic, so that this section is no longer just an expression of my own views, but also shows you how to assess your performance and gives you ways to detect potential mistakes.
I also see a lot of coverage of Anthropic’s upcoming IPO. Given the intense attention across every possible platform and in the mainstream press, I find it hard to see how to earn a risk-adjusted return above that of the market.
Here is a chart showing the performance of a few large caps over the five years following their IPO.
What I take away from this chart is that after a bullish phase in the market, the company tends to lose valuation, then grow steadily. So, given the exuberance surrounding Anthropic, I am in no hurry to buy the stock.
For Alphabet, the market was quite skeptical in its early days, so the company went public at a reasonable price.
For Tesla, part of Elon Musk’s genius is knowing how to get his companies valued for what they could do, rather than for their short-term prospects.
The company on the list that seems closest to me is Uber, because of the risk of commoditization of LLMs.
I am also pleased to see my subscriber growth since last month.
My articles on 48 Western quality small-caps and on Baviera were editorial successes, and I am glad you enjoyed them.