Investing in a concentrated portfolio of the highest quality companies in the world. All opinions my own. Not financial advice.
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Joined July 2022
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End of September 2026 portfolio update:
I'll get straight to the point. I decided to part ways with $FICO FICO at the beginning of September when shares were above $1,000. I lost money on this investment, but the damage was hardly noticeable considering the position size was very small. Zooming out, there was barely a dent in overall portfolio performance. That said, it still hurts to lose money, and it's painful to sell a business model that I once believed was the best in the world (they just made too many enemies, and perhaps got too greedy with pricing). Lessons learned!
Apart from that, I added slightly to $META Meta, $AMZN Amazon, and $BN Brookfield. There's a lot to get excited about in this market, but it's never been more important to allocate capital wisely with discipline.
With all the technological advancements and pace of change, investors are left with a simple question: Where are the best, most durable, long-lasting opportunities? And, where are the tactical opportunities to exploit? Quality investing is all about finding businesses that can reliably grow their value year after year, and holding them for the long haul. So, that's where my focus will remain.
If you haven't already, please subscribe to my Substack for deep dive equity research into my holdings (as well as other compounding machines), and highly relevant thematic trends shaping today's markets. Link here and in bio: qualityequities.substack.com
$GOOG
$META
$NVDA
$AMZN
$V
$SPGI
$UBER
$MA
$MSFT
$ASML
$KLAC
$BN
"Incredibly undervalued" is how @BillAckman described $META Meta. I agree. Bill is right in that the wild day-to-day swings in share prices are driven by extreme short-term market participants and excess leverage. At a 4.70% earnings yield and a PEG below 1, I'd say the business is trading at a rather attractive level.
$AMZN Amazon Q3: revenue $201.9B, +12% (+13% ex-FX), at the top of its $197-202B guide and just under the ~$202.3B Street number. Operating income $28.1B vs the $22.5-26.5B guide, a record 13.9% margin. EPS $1.89 vs ~$1.96 expected; last year's EPS had a $9.5B Anthropic gain.
$AMZN Amazon Q4 guide: revenue $240-247B (+12% to +16%) and operating income $28.5-33.5B vs $25.0B a year ago. CEO Andy Jassy: "Our AWS investment in functionality and infrastructure is working," and he projects AWS growth of over 40% in both 2027 and 2028.
$AMZN Amazon shares were about 6% lower after hours. The durable part: growth and margins, with record operating income and AWS accelerating. The open question is returns on a ~$220B capex year, and free cash flow is where that gets proven.
$AMZN Amazon Q4 guide: revenue $240-247B (+12% to +16%) and operating income $28.5-33.5B vs $25.0B a year ago. CEO Andy Jassy: "Our AWS investment in functionality and infrastructure is working," and he projects AWS growth of over 40% in both 2027 and 2028.
$AMZN Amazon shares were about 7% lower after hours. Our take: growth and margins are the durable part, with record operating income and AWS accelerating. The open question is returns on a ~$220B capex year, and free cash flow is where that gets proven.
$AMZN Amazon reports after the close today. A quick look at the business going in.
Last quarter:
AWS revenue $42.2B, +37%, its fastest growth in 18 quarters
AWS operating margin 39.4%
Advertising $19.8B, +26%
Operating income $27.5B, +43%
Myth: a profitable company is always generating cash.
$GOOGL Alphabet last quarter:
Operating income: $40.6B
Free cash flow: -$9.1B
How can both be true? Capex.
When a company buys servers and data centers, the full cash goes out now (capex). On the income statement, the cost is spread over years as depreciation.
$GOOGL Alphabet in Q3:
Capex: $51.4B
Depreciation: $8.4B
So profits can look strong while free cash flow shrinks.
The real test comes later: do those assets earn a good return?
$MSFT Microsoft's CFO said about 3/4 of its capex is short-lived assets like CPUs and GPUs. Those wear out faster, so the payback has to come faster too.
Profit tells one story. Cash flow tells the other.