1. Performance
Over the trailing twelve months, the portfolio is up 8.71% against +16.25% for the S&P 500 (total return).
Year-to-date, 11.66% against +13.12% for the index.
Since inception (2nd of October 2023): 72.9% vs S&P 500 80.57%.
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.
My job here is to own and follow around 15-20 stocks closely enough that you don’t have to — so you can track your portfolio in 1-2 hours a week, and still get access to the great buys when they show up.
2. Sentiment
My year-over-year performance is well below that of the S&P 500 due to the strong base effect from last year, when I was up 33% during the same period.
My sense is that outperforming the index this year depended largely on your exposure to semiconductors in the first half of the year—a period during which my portfolio had no such exposure; in fact, it was the opposite, with a focus on software.
Furthermore, my strong conviction in Atos Group means that my portfolio does not move in tandem with the S&P 500. My relative performance is largely attributable to the company’s stock price. I remain very confident in the company’s ability to turn things around, as it has already successfully overcome two of the three challenges necessary for the turnaround: the balance sheet simplification, which will be completed by the end of the year, and the improvement in the operating margin. The final step before a re-rating is the ongoing business recovery.
It’s also a message for all those who are underperforming the index or hovering around it. You always need to wait and see if your investment thesis plays out. It may be held back by investor sentiment, but in the long run, if your thesis plays out, the market will prove you right.
Peter Lynch, one of the greatest investors of all time, famously wrote: “There’s always something to worry about. But if you own good companies, you’ll do well over time.”
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