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The end of 2025 marks my 5 year anniversary as a (fledgling) Value Investor. It has been a very interesting ride to say the least, and I feel I've learned a lot over that time. Naturally, there is still a lot more for me to learn.
Of course, one of the most common questions that gets asked of value investing is can we beat the market in the long-term. It is a question I've sure we ask ourselves. I know 5 years is not "long-term", however, it's a good checkpoint along the path. So, here are my results against the S&P 500 benchmark (w/dividends included for both) and brief thoughts on what I learned:
||My Portfolio|S&P 500^(1)|
|:-|:-|:-|
|2021|15.95%|28.26%|
|2022|\-29.46%|\-14.99%|
|2023|42.86%|21.69%|
|2024|43.99%|30.03%|
|2025|25.05%|15.45%|
|**CAGR**|**16.04**%|**14.78%**|
* 2021: This was really me figuring out the basics. I started out of the gate with a mix bag of dividend positions, and a very poor understanding of due diligence. I ended the year with 11 positions. My biggest takeaway in the first year was that most articles on stocks are filled with a lot of noise/static/garbage, and should not be heavily weighted as "research".
* 2022: I moved out of 4 of my positions from end of previous year, and acquired three new positions (one spin-off). META was one, which closed the year around $120, while my cost basis was around $197. The other one that hurt was MHH; I believed in my thesis enough to ride out the drop. Lesson 1 was letting go of the garbage (which I didn't apply to MHH, but the other 4 sold). Lesson 2 was stomaching the ride down, specifically with META. That lesson I wrongly applied to MHH.
* 2023: This year was mainly building on what I already owned. I sold out of one very small position, started in 2021, IDN. I bought it with no real due diligence, then kept swallowing the garbage management shoveled in the earning calls. I sold at a 73% loss. Dipped my toes into banking with WAL during the regional banking panic of that year. Started with 10 positions and ended with 10 positions. I don't know that there was any big lesson this year. I knew by the end of 2022 that IDN was a loss. It was such a small sum of money that I kept it in as a reminder not to buy without good research.
* 2024: I had a bit more movement this year. I sold 3 positions and had one position get bought out (MDC). Realized I didn't know enough to hold WAL or MU. Both fell outside my circle of competence. Hindsight being 20/20, I do wish I would have felt inclined to learn more about MU... I also started three new positions. The lesson learned was it is okay to sell weak conviction positions to buy other stronger conviction positions. Build-A-Bear Workshop is one of those where I feel I understand the business much better than WAL. Closed out the year with 9 positions.
* 2025: I finally closed out MHH early in the year and one other position. With MHH, I realized there was an emotional attachment, that management was not turning it around, and accepted my thesis was wrong. Took the \~40% loss. I also tested out selling covered calls. Did this with WBD, which I acquired in 2022 and built up in subsequent years. Lesson 1 was I'm still human and at times irrational. I need to be more critical in my analysis of where I might be behaving irrationally, such as with MHH. Lesson 2 is that I do not understand options well at all, and I am really not temperamentally suited for them with my current lack of understanding. Lesson 3 was/is a reminder to be patient. I did not find anything in 2025 that I felt I could understand and that was undervalued. And that is okay! I don't need to swing at any pitches.