January 2025 - Portfolio Letter
Another strong month, two new buys and one sale, and an important message
Welcome to the January 2025 Portfolio Letter.
The new year is off to a strong start, with both the markets and our portfolio continuing to climb.
January saw a few trades—two new positions and one sale. The latest earnings season has also kicked off, giving us a chance to assess how our companies are performing and what 2025 might look like. Key holdings like ASML, LVMH, and Evolution have already reported, and I’ll be sharing my thoughts on their results soon.
Performance-wise, we had another solid month, starting the year with a gain of nearly 6%, bringing total returns since inception last July to 21%.
Top performers were LVMH, Sanlorenzo (one of our new additions), and Amazon, with gains of 10.7%, 8.3%, and 8.2%, respectively. The weakest performer was MSCI, down 1.9%, while ASML, Basic-Fit (our second new position), and Salesforce gained 6.5%, 5.2%, and 2.2%, respectively. Airbnb and Evolution remained mostly flat.
At the start of the month, I bought my first shares in Sanlorenzo. I recently wrote a deep dive on the company and was intrigued from the start. This luxury yacht builder has a lot going for it—resilient and loyal customers, a strong brand, an owner-operator in CEO and founder Massimo Perotti, pricing power, high returns on capital, and solid growth. And all of that at an attractive valuation. If you’re not familiar with Sanlorenzo, check out my deep dive here:
Later in the month, with cash from my monthly deposit and proceeds from a sale, I took a position in Basic-Fit, Europe’s leading fitness chain. I’ve followed the company for over a year and see it as an excellent business that’s misunderstood due to its currently suppressed profitability. The company is a clear market leader, has predictable growth, is founder-led, and has meaningful competitive advantages. I won’t go into further details here, but if you’re interested, you can read my deep dive here:
Don’t be surprised if I continue building my positions in both Sanlorenzo and Basic-Fit in the coming months.
On the selling side, I exited MSCI—my first sale having started the portfolio 7 months ago. Ideally, I’d prefer never to sell, but of course, I have my reasons. First, MSCI was always a small position that didn’t have much impact on the portfolio. Yes, I sold at a 17% gain, but its overall contribution was minimal. More importantly, I believe MSCI was overvalued, and (much) better opportunities were available. I don’t typically sell just because a stock’s gotten expensive, but opportunity cost matters. Holding MSCI meant passing up on stronger opportunities, so I made the switch. This decision had nothing to do with weakness in the business itself.
The proceeds went into Basic-Fit, which I see as a significantly more compelling opportunity right now. Cash at the moment is low, and I plan to keep it that way—new deposits will be allocated to positions that make the most sense. At the moment, I plan to increase my stakes in Basic-Fit, Sanlorenzo, and possibly Airbnb.
Interestingly, over half of my portfolio is now in European stocks. As I discussed recently, I see the Magnificent Seven as generally overvalued, and U.S. large caps have run up much more than European stocks, emerging markets, and small caps. My portfolio reflects this view, which I have no issue with—most of my European holdings operate globally, with Basic-Fit being the only purely European play.
Over the next few weeks, the rest of my companies will report earnings and provide guidance for the year ahead, setting the tone for 2025. I’ll be covering it all and sharing my thoughts along the way.
Also, a quick but important note before you go—I’ll be introducing a paid tier for subscribers in the future. It’s still a little way off, but I wanted to mention it early. More details to come, but here’s what I can share so far:
Free subscribers will always continue receiving content
Paid subscribers will get access to all future posts, plus:
Deeper insights into my portfolio, with complete transparency
More extensive, higher-quality stock Deep Dives
A unique financial tool we’re developing behind the scenes to help you make informed investing decisions
In case you missed it:
Disclaimer: the information provided is for informational purposes only and should not be considered as financial advice. I am not a financial advisor, and nothing on this platform should be construed as personalized financial advice. All investment decisions should be made based on your own research.