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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'm sure we all 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:
|Year / Portfolio|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%**|
^(1 - S&P 500 data taken from DQYDJ and Of Dollars & Data.)
2021: 11 positions EOY. This was really me figuring out the basics by jumping in feet first. Mistakes were made... Most, if not All, of them. 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: Moved out of 4 of positions from end of previous year. Acquired three new positions (one spin-off). New META position closed $120 with my cost basis was ~$197. The other hurt was MHH; I believed in my thesis enough to ride out the drop. Lesson 1 was letting go of the garbage, but I should have applied to MHH also. Lesson 2 was stomaching the ride down w/META, which I should not have applied to MHH.
2023: This year was mainly building on what I already owned. I sold out a very small position in IDN, started in 2021. Bought with no real due diligence, then kept swallowing sunshine management shoveled. Sold at a 73% loss. Started with 10 positions. Ended with 10 positions. I don't know that there was huge lesson to '23. I knew by the end of 2022 that IDN was a loss, but held a few months longer as a reminder.
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, which fell outside my circle of competence. Hindsight being 20/20, I do wish I would have felt inclined to learn more about MU... Started three new positions. The lesson learned was it is okay to sell weak conviction positions to buy other stronger conviction positions. 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 to do well.