Model Portfolio Update

The model portfolio’s total return stands at 138.8%, a sharp increase compared with the previous update on May 17 (82.1%). The reason there was no separate update over the past three months is that we did not find better opportunities from a fundamentals perspective. Trading without a sound reason drags down a portfolio’s long-term returns.

While there has been little change in the fundamentals of our portfolio companies, investor sentiment has generally improved as concerns (or fearmongering?) about AI-related growth have subsided—driven by the fading impact of President Trump’s tariff-bomb rhetoric and news such as Microsoft canceling its data center plans. In the process of the market correcting mispricings in portfolio companies whose fundamentals it had significantly “misunderstood,” the “reported return has improved.”

As we always emphasize, markets are far from perfectly efficient—and that is precisely why return opportunities exist.