Portfolio Update — May 2025

YTD: +13.58%, 1Y: +22.06%

Markets never change their character, even if they constantly change their minds.

Here we are in May 2025, witnessing yet another episode of market volatility driven by headlines about trade tensions and interest rate speculation. The financial media, as always, frames each market dip as the potential start of something catastrophic.

Yet behind this noise, businesses continue operating. Cash registers still ring. Services still deliver value. The disconnect between short-term price movements and long-term business value creation remains as wide as ever.

"The big money is not in the buying and selling, but in the waiting." — Charlie Munger

The past quarter has been a masterclass in the value of patience. While traders frantically react to each news cycle, the rational investor recognizes that volatility creates opportunity.

When stocks of excellent businesses decline not because of deteriorating fundamentals but because of general market fear and uncertainty, I don't see risk – I see potential reward. This simple principle has guided my investment approach through countless market cycles, and it continues to serve us well today.

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Performance: Patience Pays

Year-to-date, my portfolio has returned +13.58% compared to -3.01% for the S&P 500.

More meaningfully, over the past twelve months, we've gained +22.06% versus +12.26% for the index.

The one-year chart tells an interesting story of independent thinking – while our returns have generally moved in the same direction as the broader market, the magnitude of our outperformance widened substantially during periods of market stress.

This pattern isn't accidental. By focusing on businesses with genuine competitive advantages and purchasing them at reasonable prices, I've built a portfolio that can weather volatility better than the index.

However, I take no victory laps for short-term results. These numbers reflect nothing more than a snapshot of prices that Mr. Market has assigned to our businesses on arbitrary dates.

What matters is the underlying business performance of our holdings, and on that front, I remain optimistic.

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Portfolio Positioning: Quality at Reasonable Prices

Looking at our current allocation, the portfolio remains focused on a select group of high-conviction positions, with our top five holdings representing over 50% of total assets.