2025 Performance Review: A Look Back at Premium Recommendations

2025 Performance Review: A Look Back at Premium Recommendations

Over the past few weeks, I’ve taken time to review the performance of my premium recommendations. Today, I want to share a clear, data-driven look at how those recommendations performed in 2025—and, just as importantly, why they performed the way they did.

Performance reviews can be done in a lot of different ways. What follows isn’t meant to be a perfect, apples-to-apples comparison with an index. Holding periods varied widely, position sizes differed from investor to investor, and some recommendations were held for the full year while others were held for only weeks. But I do think this exercise is useful for understanding where returns actually came from, what worked, and what I’ve learned.

The Big Picture

Across my premium recommendations, the average return in 2025 was approximately 31%, compared with about 18% for the S&P 500 over the same period.

That’s solid outperformance—but the more interesting story is how that return was generated.

Buying Growth at Value Prices

One clear pattern that emerged in 2025 is that my biggest winners came from stocks that were both cheap and capable of compounding—in other words, growth businesses purchased at value prices.

This was very much the case with Western Digital and Airtel Africa. In both situations, the market was pricing the businesses as if growth was either nonexistent or permanently impaired. In reality, both companies had substantial long-term growth potential that simply wasn’t reflected in their valuations at the time of recommendation.

When that disconnect finally corrected, the upside was dramatic.

Recommendations Made Prior to 2025: The Main Drivers

A meaningful portion of 2025’s performance came from investments that were recommended before the start of the year. This group generated an average return of roughly 58% in 2025 and was the primary driver of overall results.

Two investments, in particular, stood out:

• Airtel Africa, which rose approximately 240% during the year
• Western Digital, which gained approximately 283%
  

Airtel Africa was originally recommended in 2022 and spent a long time going nowhere. All of its gains showed up in 2025, but they were the result of a multi-year holding period. Western Digital followed a similar pattern—it had been owned for over a year before the stock finally re-rated in a meaningful way.

An important nuance here is position sizing. Airtel Africa was not a particularly large position going into 2025—roughly a mid-single-digit percentage of the portfolio. Even so, it contributed meaningfully to overall returns. That experience reinforced something I’ve come to believe more strongly over time: there is real value in having smaller positions in high-upside ideas that may take years to work. Smaller sizing makes patience easier.

The Role—and Limits—of “Cigar Puff” Investments

2025 also reinforced an important distinction in my investment process.

“Cigar puff” investments—situations where most of the value is already visible and the upside is largely finite—can generate attractive short-term returns and strong IRRs. These ideas absolutely have a place in a portfolio, and I continue to pursue them selectively.

However, in my experience, they do not tend to be the primary drivers of long-term performance.

Cigar puff investments work by realizing existing value rather than underwriting sustained growth. They can produce clean wins, help manage downside risk, and allow capital to be recycled—but they rarely turn into the kinds of multi-bagger outcomes that meaningfully move long-term results.

The biggest contributors in 2025 did not come from cigar puff investments. They came from businesses that were mispriced and capable of growing.

Recommendations Closed During 2025

Another set of recommendations consisted of positions that were closed during 2025, including a mix of older ideas and shorter-term opportunities.

As a group, these investments generated an average return of roughly 12%.

Some of these were intentionally short-duration trades. A good example is the Lennar exchange offer, which was essentially a 30-day opportunity. Returns here should not be interpreted as annualized; they reflect what was available over a defined window of time.

These ideas served their purpose. They added incremental returns, freed up capital, and reduced risk—but they were not the main engine of performance.

New Recommendations Introduced in 2025

The final group includes ideas that were introduced during 2025 and remain open today.

So far, these positions are up approximately 9% on average. Given that many of these ideas are still early in their lifecycle and tied to longer-term catalysts.

In most cases, I would not expect an investment to deliver its full value in the same year it’s initiated—and 2025 was no exception.

Why I Do This Review—and Why I’ll Do It Again

One of the main reasons I go through an exercise like this is not just to report results, but to refine my investing style.

Looking back at performance forces me to be honest about what actually drives returns for me—and what doesn’t. Over the years, this kind of reflection has pushed me to evolve. Earlier in my investing career, I leaned heavily toward very concentrated positions. Today, I place more value on diversification across ideas, particularly when those ideas have long duration and uncertain timing.

That shift has helped me stay patient, avoid forcing outcomes, and ultimately let the biggest winners play out.

Key Takeaways

1. Outliers drive results
A small number of large winners were responsible for a disproportionate share of returns.

2. Buying growth at value prices matters
The biggest gains came from companies that were cheap and capable of compounding.

3. Position sizing and diversification affect behavior
Smaller positions across more ideas make it easier to stay patient and let long-term theses play out.

4. Cigar puff investments have limits
They can generate attractive IRRs but rarely drive long-term wealth creation.

5. Results will vary by investor
Individual outcomes depend on which ideas were owned, for how long, and at what weights.

Closing Thoughts

Overall, I’m pleased with how 2025 played out.

The strongest returns came from patient ownership of undervalued businesses with real growth potential. Cigar puff investments added value around the edges. And reviewing results in this way continues to help me refine how I invest.

As always, thank you for following along.