Intrinsic Value Portfolio Review: Performance and New Positions
TL;DR
The Intrinsic Value portfolio achieved 9% returns in its first year despite carrying 25% cash, with Google and Reddit as standout winners, while the hosts discuss holding winners long-term and evaluating new positions like Copart and Ferrari through holding company Exor.
📈 Portfolio Performance Review 3 insights
Strong first-year returns despite cash drag
Portfolio returned roughly 9% with 25% cash position (down from 50%), demonstrating solid performance while building positions from scratch.
Google and Reddit drove outperformance
Google became the largest position and is up over 50%, while Reddit delivered 120% returns despite being only 3.5% of portfolio due to rapid appreciation.
Conservative approach prioritized over aggressive allocation
Hosts chose cautious position sizing over maximizing returns, believing it's harder to recover from losses than to miss some upside.
🎯 Investment Philosophy and Portfolio Management 3 insights
Let winners run strategy adopted
Despite Reddit appearing overvalued, they're holding long-term rather than trimming, following Peter Lynch's advice to avoid 'cutting flowers and watering weeds.'
Building from scratch reveals allocation challenges
Starting at 100% cash exposed real-world difficulties of position sizing and portfolio construction that finished portfolios don't show.
80% rejection rate maintains quality focus
They say no to about 80% of companies they research despite selection bias toward interesting opportunities, emphasizing high standards.
🔍 New Investment Opportunities 3 insights
Copart added at attractive valuation
Purchased 2% position at $39 per share after identifying it as undervalued on their watchlist review.
Ferrari through Exor holding company discount
Exor trades at significant discount with Ferrari stake (39% of assets) worth nearly entire market cap, effectively getting CNH, Stellantis, and Phillips for free.
Cyclical opportunities in depressed industrials
Both CNH and Stellantis at 5-year lows due to cyclical downturns, presenting potential entry points when sentiment turns.
Bottom Line
Focus on building a concentrated portfolio of high-quality companies with long-term holding periods, letting winners run while being patient with cash deployment and opportunistic during cyclical downturns.
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