2025 Portfolio Review

For calendar year 2025, the Superfluous Value portfolio gained 51.7%, outperforming the MSCI World which rose 13.3% (both in AUD). In USD, the portfolio returned 64%.

Since I began formally tracking my portfolio in Aug 2018, I have gained a cumulative 191.6% at a 15.7% CAGR, outperforming the index which has returned 130.5% at a 12.1% CAGR (both in AUD).

It was the sort of year that may only come once in a career. Almost everything worked as the markets finally looked beyond US tech to Asian holdcos, commodities and EM value. The level of outperformance was particularly surprising given the AI bubble and crypto/meme silliness rage on and that I began the year with 24% cash.

I am well aware that investing is its hardest when it feels the easiest and am still raw from a number of dumb mistakes I made in 2022, so now is a time for elevated caution.

Detractors

The major loser for the year was S4 Capital. The shares are down 60% from my purchase as their big-tech clients are currently redirecting their spending towards AI capex and away from digital advertising. This is likely not sustainable and the company would be worth several times the current price to a private buyer, as I argued recently here. The UK remains my most prospective hunting ground at present.

*As I edit this, S4 has put out a positive trading update and the stock is up 35% on the day.

My other main source of error for the year was selling Babcock International, Lloyds Bank and Telefonica Brasil too early. Value investors often want to show how masochistically disciplined they are and cut multi-year investments off at the knees just as they start too work. There’s no satisfactory answer to this. Often my intrinsic values are far too conservative and I could allow them to evolve as conditions improve. We’ll see, but it’s frustrating.

Contributors

A successful, long-term portfolio needs the chance for outsized winners to flourish and 2025 saw Superfluous Value’s first ten-bagger as Cameco pushed through $100/share. I only have a quarter of my initial shares after halving the weight at $52 and again at $78, but the stock remains a large holding.

Hong Kong value stocks performed well over 2025, with Jardine Matheson, Hysan Development and CK Hutchison rising meaningfully. It’s easy to forget it was only 12-18 months ago people were spewing out their HK shares and calling China “uninvestable”- the sweetest word in investing. Jardines and CKH in particular are currently pursuing resource conversion at a frantic pace, with Jardine buying out Mandarin Oriental and recruiting new leader Lincoln Pan from private equity, while CK is pursuing its delicate port sale and exploring spin-offs of AS Watson and its European telecoms. These continue to be reasonably valued and great dividend payers, which helps a lot with investor patience.

Millicom doubled over the year and remains comfortably the largest position in the portfolio. It says a lot about the extraordinary impact controlling shareholder Xavier Niel has had at the company that it still looks reasonably valued after such a strong run. Costs have been slashed, a solid dividend has been initiated, multiple attractive acquisitions have been completed, their tower portfolio monetised, the listing consolidated onto the NASDAQ among the flurry of activity. The shares trade at 13.5x FCF today and I will likely trim a little soon, but remain hopeful I have stumbled into a long-term compounder here.

Precious metals went ballistic. I have owned Barrick since 2018 and it had done precisely nothing, but it woke up in 2025. Pan-American, Impala and Valterra (formerly Anglo-American Platinum) also rose strongly, due to the inflation/monetary debasement thesis that is getting more mainstream. The PM miners are very difficult to value here. Depending on the gold/silver/platinum price you use you can arrive at any NAV you need. Hopefully I can manage them in a measured way.

During the Liberation Day sell-off I was able to add Japanese precision-grinding machine manufacturer Okamoto Machine Tool Works at a crazy valuation- under 1/2 of book value. The position rebounded strongly and ended the year up around 60%. The company is an interesting case study in US vs Ex-US valuations, as one of the primary uses of their equipment is grinding silicone wafers, so they could certainly be considered AI-adjacent. It would probably trade around 40x on the NASDAQ, rather than the current low-teens multiple.

The portfolio consists of 24 positions and 14.8% cash at 26/1/26.

Superfluous Value portfolio at 26/1/26

I won’t break down every position like I have in the past, but feel free to ask in the comments and I’m happy to give my rationale for any position.

Conclusion

The portfolio is in a delicate balance. It’s a good problem, but many of the names are no longer obvious no-brainers after a run-up and there are fewer clear replacements with many global markets having had a strong year. The only logical course is to slowly move toward higher cash and trim when the opportunity arises.

UK value stocks still look very cheap, as do oil stocks- although I don’t see as many obvious energy bargains as many are claiming. I’m looking at Chord and Harbour Energy presently, but please share any other interesting energy producers.

Here’s to a happy and profitable 2026,

Guy

I own positions in all the companies in the provided table.

PS. As always, this isn’t investment advice. Please do your own due diligence and seek professional advice if you’re unsure about your finances.