2025: Reflections

A successful, but frustrating year

Dear Reader,

That was a pretty crazy year. I’m pleased — and a bit mystified — that I was able to grind out a return of approximately 44% with essentially zero exposure to AI. I worked hard — and you know what, I’m not exactly proud of that. You see, historically I’ve been proud of proving that I can do my own thing, implement my own style — but with a few more grey hairs I simply don’t care about proving anything, I just want a balance between effort, stress, and returns; I don’t care who gets credit. So honestly, I’m sympathetic to anyone who reads that first sentence and thinks “What are you doing? Your primary job in 2025 was to figure out the AI trade, not avoid it.”

What went right

• Calling the defense trade pretty well between CNRD US, CODA US, ISSC US, PKE US

  • Jamie Dimon went on TV and basically told Trump to spend as much money as he wants. And I correctly recognized how important that moment was.

• The acquisition of TRBR CA, a long-term holding of mine

  • Takeaway: Exceptional teams foster exceptional outcomes.

• Buying Abercrombie at like 6x earnings

• Hanging tough on my favorite gold developer, though I missed most of the rest of the precious metals rally

• Some of my limestone / cement investments worked out pretty well (BZU MI, SRC LN, NC US), others just bobbled around (5233 JP, GCC MX).

• My largest holding, NGS US, continued to chug along

• I chipped away at hundreds of smaller trades with small/moderate edge

• Being early to news / game-changing earnings

• Frequently and generously admitting when I was wrong or made a mistake, and quickly moving on

What went wrong

• Paper-handing obvious mid/large cap opportunities. B US, LMT US, Sumitomo Metal Mining, Umicore, HII US. Practically inexcusable.

  • Takeaway: Be mindful of the stakes you’re playing for. Scalping Barrick Gold for a few percentage points as it lags 10,000 bps behind the gold price — or Huntington Ingalls as President Trump literally obsesses over the navy — is just pathetic! Fat pitches in large caps are rare — take advantage.

• Hanging on to U.K. stonks that mostly bled out or went nowhere

• Hedging was just short of a massive flaming disaster — I lost ~400 bps on index hedges and ~300 bps on duration hedges. Couldn’t catch a break. It was both frustrating and feels like it was a waste of money.

• I took a few big (300-400 bps) speculative swings that almost all instantly failed. I’m not sure exactly what lessons I learned, but the major one is that sizing too big can force a loss where there could otherwise be a gain:

  • VAL US Warrants — I embarrassingly realized that they had no buyout protections and puked a ~100 bps loss. The market was coming to the same realization as me at the same time about the buyout protections. I literally lost money buying warrants when I could have made money buying calls.

  • AREC US — I knew exactly what was going on here. I knew I was buying a hype rare earths stock purely for its memeability. I bought too large of a position and this forced me to manage the risk too tightly with a stop loss. I puked out a ~75 bps loss right before the stock rallied like 400%. Brutal.

• Most headline-cheap opportunities at 9x-12x forward earning: the market was almost always right; street estimates were too high

  • Takeaway: Know where the bar is at any given time for value. A lot of my failed trades of last year make more sense in the context of Abercrombie working — 10x, 9x, or even 8x isn’t necessarily cheap enough to get the market excited, much less flat out admit it was wrong.

Overall, I’m grateful for a strong year. I’ll consider it a win in 2026 if I can make any significant progress with regard to listening to my analysts, sizing speculative positions, responding to news, and pouncing on obvious large cap opportunities.

P.S. I apologize: I’ve been promising a full portfolio update, but I’ve been waiting for my portfolio to settle down. I expect to release a portfolio update alongside my 2026 Outlook in a few weeks.)