Investing Diary Update
+19.5% YTD, +38.2% per year since inception
Equity Investing is about choosing resilience over resistance.
The difference?
Resistance rejects shocks and turbulence.
Resilience embraces volatility. It conceives taking multiple hits to come back stronger.
That would be the one-line summary of my first half of 2025 as long concentrated investor.
In today’s update, let me share some reflections and diary notes.
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YTD & Inception Returns
Quick Disclaimer.
I'm sharing this not to brag, but to keep this journey transparent and consistent with previous episodes.
Knowing that markets can correct tomorrow and this may not “age well”.
Here’s a 10-second peek inside the broker (to show it’s not made up):
Now, let’s let some more granular statistics do the talking:
YTD return: +19.55% -vs
S&P 500: +1.95%
Nasdaq: +1.25%
Worst month: -9.74% (March)
Best month: +16.9% (May)
Peak to trough: -28.68% (→ that’s the hit)
‘25 Bottom to new highs: +43.47% (→ and that’s the resiliency)
Since inception on 1.1.2021:
+38.21% MWR (XIRR) per year -vs
+10.90% of S&P 500
+12.59% of the Nasdaq
These figures are the result of a detailed analysis on G-Finance that simulates purchases of SPY and QQQ with the same timing and amounts.
I know what you may be wondering.
“These rewards must come with crazy risks”.
But actually - this is what I am paying the most attention to.
As semi-passive long-term investor, I want to make superior returns feasible without massive time waste and unnecessary risk.
And that’s why all my frameworks have just one specific goal in common:
Asymmetry.
Meaning, seeking high-quality businesses with strongly favorable odds.
In concrete terms, let me share some data around:
Time spent
Portfolio KPIs (health-check)
🕘 Time
So far this year, I’ve manifested:
Less than 8 hours per month dedicated to the portfolio
21 transactions in total, of which:
the vast majority in March, during the correction
none May and June so far
Closed positions: 2
New positions: 2
This is slightly above 2024, with 25 transactions in total for the year.
Ideally, my goal is to stay below 35 until year end.
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📊 Portfolio KPIs
Here’s my summary dashboard from fiscal.io (btw, congratulations to the former Finchat. io on the rebranding!):
As you can see, these are blended metrics of a healthy portfolio.
Let’s recap them through some of my investing pillars:
Profitable Growth:
Revenues: +24% 3-year CAGR
Operating Margin = +15.7% (weighted average)
Innovation Spirit:
R&D on Revenues = 15.2%
CapEx on Revenues = 10%
This equals → 25.2% of revenues spent on future growth projects!
Cash Flow:
Cash From Operations (5Y CAGR) = 40.5%
Free Cash Flow (average) = 26.5%
Capital Allocation:
ROIC > 26%
ROCE < 20% only because of the massive weight of cash on the blended balance sheet
Balance Sheet Solidity:
Shares dilution capped < 2%
Overall positive NFP (cash higher than long-term debt!)
Goodwill under control (<10% of total assets)
Bankruptcy risk: zero
Sure, all of that may come at the expense of the blended 1-year forward valuation and beta.
Yet with my time frame of 3 to 5 years minimum, I can totally tolerate unoptimized short-term valuations as long as I’m securing the highest quality I can understand and capture.
It took me years to put this picture together.
It’s never been such a sleep-well portfolio.
Broad market thoughts?
Many have been calling for “low future returns” for years now.
And one chart always comes up: S&P 500 forward P/E vs expected returns.
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Besides the questionable statistical significance of this correlation (R-squared below 80%…), I see a few limitations:
It considers GAAP accounting profits only - biased down by the heavier and heavier impact of intangible investments on the P/L
It’s a static view, does not factor in the unknown increase in value over the next 10 years
It does not factor in the potential incremental return on the massive CapEx investments the highly concentrated index is pursuing lately
So, if we adjusted it as explained:
Adding back 10% of intangibles to earnings → we could go from 22.5x to 20/20.5x
Assuming historical EPS upside of at around 5% per year, on top of
Solid Incremental ROIC from CapEx
This looks a pretty acceptable market to me.
Yes, we may be slightly above historical levels, but not that much.
A normal 15% correction would bring this market right back to baseline.
And as usual, I’ll come prepared.
With my current cash or equivelents level at 8%, my goal is to return to a 10-15% buffer by year end.
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This stock is unlocking new mental biases!
My final thoughts are dedicated to a stock that’s causing the most mental noise.
That company is Tesla.
Surprisingly, I’ve been experiencing new behavioral biases with it.
🧠
The first: halo effect.
I am isolating the FSD opportunity as standalone catalyst to justify my investment.
I will take a closer look to whether this segment is actually enough to confirm my ‘hold’.
The second: backfire effect.
Backfire occurs when we react to some evidence with opposite feelings and arguements.
In this case, Elon was clearly a damage for the company (I was pretty annoyed too), but somehow I’m secretly hoping for his full-time comeback.
Which may never happen.
The third: endowment + emotional attachment.
For some reason, Tesla has always felt a ‘must have’.
As I already mentioned, I am particularly touched by the FSD opportunity that could save thousands of lives.
But this again may be forcing myself into a blind love spiral for the stock.
Note:
I’ve sold one tenth of my position in Tesla in April, but that came with a lot of emotional burden.
I will make sure to fix this.
This is how I can help you:
If you’re also an ambitious professional who’s looking to diversify into equities and potentially leverage modern value investing as your n.1 wealth engine:
You can find out what working with me is about 👇🏼 (link here)
➡️ Click here to watch the explainer video
You’ll discover:
if this is for you, or not
what qualifies me, my background, and returns
the structure of the Program
No fluff, no quick wins, no quick info without an actual system behind it.
In an era of peak skepticism and trust crisis, I truly appreciate you considering this.
📲
Once you’re ready, directly book a call and meet me inside.
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📊
Financial Statements Masterclass - [Waitlist & Early Access]
As anticipated, I am preparing a self-paced masterclass on how to read through financial statements with the eye of an investor.
Thanks to all of you who already joined the waitlist!
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Thank you again for your valuable time.
Happy Investing!
Francesco