Hey, fellow “Moater”,
Today I will share my recent portfolio moves, performance, and my thoughts around it. And the tortoise and the hare story coms to mind.
You know how it goes. The hare sprints, gets cocky, takes a nap. The tortoise plods along and crosses the line first.
Every investor claims to be the tortoise. Almost nobody actually is, because being the tortoise feels terrible in real time. The tortoise spends most of the race looking slow, dumb, and behind. Nobody writes articles about the tortoise at the halfway mark.
Here’s what this portfolio looked like at the halfway mark:
Topicus was sitting at 2023 prices. Veeva was down 50% from its high. ATOSS had been cut in half from its peak. I bought all three anyway, and for a while, the market told me daily that I was wrong.
The tortoise has to be willing to look like a loser for a long stretch of the race. In investing terms: if you own quality businesses you genuinely understand, you have to be comfortable seeing them in the red.
Sometimes for months. Sometimes for years.
This month, the market suddenly decided to pay me for a lot of sitting on my ass. I want to be very clear that I take no credit for the timing.
The 30% number is nice, and I’d caution you against extrapolating it. My process, The Atomic Moat Process, is the same either way.
Here’s the short version before the detail:
The portfolio is up roughly 30% year to date, with every position in the green.
My best performer is now up 76%, a near-monopoly I bought while it was down 50% from its high and everyone had written it off.
I sold a position I opened just eight weeks ago, and I’ll explain why that isn’t the hypocrisy it looks like.
I took the proceeds and made a German software company my largest position, at nearly a third of the portfolio, and I’ll show you the exact reasoning.
The position I confessed to buying “too expensive” last month is up 26%, and there’s a lesson in that about price anchors.
The portfolio is down to five businesses. I’ll walk you through each one, the moat in plain English, and how I’d behave if every single one turned red tomorrow.
Now let’s bite into the good stuff:
