Welcome back everyone. Christmas has come early in the form of the stock market. Go on up like crazy. Check this out from CNBC. We have the indices moving right now. As of right now we have the S&P 500 almost up two percent, 1.87% Right now, the Nasdaq's up 2.2% and even the Russell the Russell 2000 is making a big move today in the green up 4 1/2%. Even the Dow Jones, which is usually a little bit behind, it's still up 1.4%. So stocks are zooming up and the reason why?
Well, the inflation numbers came in and they were, they were. I don't know if he called a beat or a miss, but either way it was way lower than expected across the board. They beat on everything. We were expecting inflation to be here and it was a little bit underneath in all categories. J Pal's doing a great job bringing inflation down so far
without ruining the economy. A lot of people have said that it's impossible, that it's going to be a hard, difficult landing, that we have to go through economic destruction, tons of job loss and maybe we will in the future, but not today, not today. As of right now, the market is in the green big time. The bulls are winning this battle and it's been a pretty exciting morning. And while this has been happening, I'll give you a quick glance at my portfolios. We have the story fund.
This is my smaller, little bit more aggressive, a little bit more volatile portfolio. It's up $15,000 in the green now just today it is up 1.89%. So right there a little bit above the S&P 500, a little bit below the QQQ. But this portfolio has been having an incredible month. The one month on it is 12 percent, 12% in the past month. In fact in Netflix, Netflix is up 26% in the past 30 days. So huge recovery from one of my companies that say 24% position.
And overall if we look at the returns of the Story Fund, we benchmark it against SPY, it is now within 1% of the S&P 500 right there. The Story fund is this blue line, the S&P 500 is in red and the Story Fund had fallen behind. We've made some better decisions. We've caught back up and now we are basically neck and neck within 2%. So it's anyone's game. Now the story fund is in a position where we can surpass SPY.
If we get more good Netflix reports, more subscriber gains, more cash flow, as well as Amazon, these two companies alone will pull this portfolio ahead. So that's exciting. And then the passive income portfolio is also having an incredible performance. It's been doing really well. It's been keeping up with these gains. Today it's $110,000 in the green. I think this marks an all time high. Just today it's up to .1%. So this more conservative portfolio is making better gains
today. On a big Green Day, VG's up 4%. On the day, that's pretty big. Costco's up 2% today. That was a company that I recently visited at Costco last Saturday, and boy was that a mistake. Don't go into Costco on a Saturday. Way too busy, jam packed the entire time in the financial category. These companies are killing it, but especially into it. I've been trying to get people at least interested in looking at into it and I haven't done a
good job. I feel like not a lot of people have looked at this company, but it's up 4% on the day and I just bought into this company this year. I bought into it on a dip. We're already in the green by $10,000. In fact, I think out of all my investing positions, this is the fastest 1 to $10,000 in the
green. Now I know during times like this when the stock market's racing up, when it's in the green, when we have a lot of momentum, it's really exciting and I do think it's fun to be a part of it and celebrate the gains we're making. But this is also the exact moment when we should be cautious, level headed, rational when we don't want to get caught up in the FOMO, the fear of missing out, pulling us into bad investments. So even though the portfolio's had an incredible performance
this year, it's doing well. I'm going to remain very cautious and disciplined with my approach looking for reasonable valuations and companies that I still think have really good risk rewards. Now that we've seen a little bit of My Portfolio, I want to change gears and go over some
super investors. It's that time of year again where the 13 F filings are due, meaning that investors that manage over $100 million are legally obligated to disclose their holdings and their positions that they had last quarter. This gives us unique insight into what they're holding, what they're buying and what they've recently sold. And from that we can try to reverse engineer what their investing strategy is, what their thoughts are, what's going behind these moves.
So what we have here is a list of super investors that we're going to be looking at. We have Terry Smith, Chris Hohn, Josh Tarasov, Michael Bury and Thomas Russo. These are all incredible super investors and I'm excited to go through their portfolios. So let's go ahead and see what
we can learn. Now. The first super investor we're going to be looking at is Terry Smith. He is the fund Smith investor from the UK He's very competitive and he focuses on companies that he considers to be very high quality. Now quality is ambiguous. What does that mean? Well, Terry Smith defines quality as companies that have persistently high ROCE returns on capital employed. That's very similar to high returns on invested capital or returns on capital. They'll measure basically the
same thing. So Terry Smith is an investor that will invest in companies like Microsoft. Because if we go to Microsoft and we look at their ROCE, which we have measured here right in Qualtrum, you'll notice that it's very high, 28 percent, 30 percent, 29%. This is pretty high. If we look at other companies, for example, like Ford or any airlines or a lot of different industries, we can look at the ROCE of Ford and it's 7%, ten
percent, 5%, very low. He's never going to buy companies like this because he doesn't consider this quality. So let's go ahead and take a look at Terry Smith's portfolio. We'll bring it up here. And as you can see, it has a lot of these companies, Microsoft, Meta, Philip Morris, ADP, Visa and again, all of these have that same metric. We look at his activity and we filter by what he's actually changed. His biggest sell is Estee Lauder. His biggest buy is Marriott.
So we basically sold out of Estee Lauder and he put that money into Marriott. Let's go ahead and take a look at each. We're using Qualtrum here. This website's available to Patreon members. Now, Estee Lauder has been in the gutter this year. It's down 51%. It's had a terrible performance. The revenue has been declining, the free cash flow has gone negative and the earnings have declined.
I was lucky enough to sell out of Estee Lauder pretty high because I listened to the earnings reports from the management and I was not impressed. I saw so many red flags them talking about troubles in China then blaming a different factors that are outside of the company over and over and over again. When I see that happen when a company point the finger at something else, that's not something I like to see. So typically I move out of those
companies. We can also see that the ROCE of the company's dropping overtime which is not a good sign. So Estee Lauder is a company where the fundamentals are deteriorating to some extent that is undeniable. And Terry Smith does not hold companies where the fundamentals deteriorate. He switches in for companies with strong fundamentals. So let's go ahead and take a look at Marriott here, We'll bring it up. This company has a decent free cash flow, yield, A20, 4PE
ratio. As you know, Marriott's asset light, they don't really own a lot of their real estate. They just license their name and their hotel operator. And we've seen a bit of rebound in the travel industry. So the cash flows seem to be on track. They're going back up. It looks like the metrics here are good overall and if we look at the ROCE of the company, you notice the exact opposite trend. So this does not surprise me at
all. With Terry Smith, this is right in line with his investment philosophy. I think he's doing exactly what he says he'll do. Overall, his portfolio looks mostly the same. He still has a huge holding in Microsoft, over 10% and then every other position is about 7% or below. He has a little bit of meta, Phillip Morris, ADP, Visa, McCormick, Pepsi, all these really cash flow positive companies that have higher ROCE than the index. This is really what he leans into.
I don't see any problem with this. I think Terry Smith is doing exactly what he's always done. Now this next investor, Chris Hohn, I believe is the real deal. He's one of the top five working today. He manages A portfolio, get this, the portfolio size is 28 billion dollars, $28 billion and he has a total of 9 holdings. So if you want to talk about concentration, think about concentrating $28 billion into
nine different positions. He's able to do this and he's able to outperform for a long period of time because he concentrates into incredibly high quality companies. He understands these companies inside and out. So he has a very good risk assessment of what he's buying. Now let's go ahead and take a look at his portfolio here and the trades that he did last quarter. This is it, Q 3/20/23. He sold his entire stake in Microsoft. This was a 12% position.
This could either be good or bad depending on when he sold, because Microsoft just went through a massive rally. If we bring up Microsoft here, let's just take a look at the past month. It's up 10% in the past month, so if he sold down here right before a big rally, that was probably a bit of a bummer. I think he'd be bummed out if he sold just before this massive rally this month. And unfortunately with the filings, we don't know exactly
when he sold. So this could be either good or bad, but my guess is he probably sold it just a bit too early before this big rally. That would be my guess. Either way, he still made a lot of money with Microsoft. This was still a hugely positive holding, outperforming the index. So he still did well, but he probably would have done a little bit better by just holding onto it the current day. If I had to guess why he sold Microsoft, I think it's almost entirely due to valuation.
Microsoft has done so well for such a good period of time and the valuation has expanded. So I think that's the reason why. Now the next things he did was he sold a little bit of Visa, a little bit of trimming of Google, a little bit of S&P Global, a little bit of Moody's. I don't read into this too much. When it's less than a percent, that can mean because they're just they, they have some withdraws or they have some they, they have some redemptions. It can mean a couple different
things. So this doesn't spook me out of these holdings. They're still heavily invested in them. Let's go ahead and take a look at his holdings here. Like I said, there's nine positions, There's really eight that he has a substantial holding in. So this is concentration. This is knowing what you're investing in and making substantial bets. The biggest companies that he's currently invested in is GE, and he's had this one right so far.
He invested in this company while a lot of other people were completely bearish on it, and he won. It's up 76% year to date, so he really won on this one. So GE has been a massive success for him. Personally, I'm not touching the company. I won't touch GE. I don't know enough about it. I don't necessarily think it's that high quality, but I'm outside of this industry. I really don't understand it, so I'm staying far away. Now. GE makes up around 17% of the portfolio.
The other 30% of it, 31%, are railroads. We have Canadian Pacific, Kansas City Southern and Canadian National Railway, around 15% in each of them. I currently hold Canadian Pacific, Kansas City Southern. I think the railroad has lower downside. I think it's a very stable business, high barriers to entry as well as it produces a significant amount of free cash
flow every single year. Another thing about rail is there's likely going to be more onshoring of manufacturing with things being made in Mexico and the US and Canada. That means more stuff being shipped around within the US and that's where rail comes into play. So there are some secular trends working for these companies. Next up we have Visa. So we have Visa right here.
He doesn't own any MasterCard. My bet's on MasterCard, but I just as easily own Visa. I view these companies as high quality tech companies that are data information companies. They're not just credit card companies, they're not just financial companies. This is an incredibly high quality tech focused financial network company. Next, we have S&P Global and Moody's around 12% in each of these companies. The credit rating agency in and of itself is a huge Moat business.
It's very difficult to compete with credit rating agencies. And then these businesses also have very high margin analytics businesses attached to them. S&P Global's heavy into data and indices, Moody's into company analytics. So again, I think part of these companies are both tech companies. Next up, we have Google around 8%. That makes sense. Another wide Moat company, very significant cash flows.
Then we have Thermo Fisher Scientific at 5.8%, another very strong cash flow company, very wide Moat. And then we have Ferguson at .29%. This seems like a watcher position. It's not meaningful. When I look at this portfolio, I once again come to the assessment that it's an incredibly high quality concentrated portfolio. It's highly likely to outperform the S&P 500 over the next 10
years. Now you may say it's greater risk because of the level of concentration, but keep in mind what he's concentrating into and the types of businesses these are. These are world class monopolistic businesses. So overall, I once again think Chris Hone has one of the best investing styles in the market and I see no red flags right now. Now Next up we have Josh Karasoff, who manages a $300 million portfolio and he also holds a lot of concentrated
positions. So he only has 9 total holdings. Now let's go ahead and take a look at what he's done over this past quarter. We'll look at it here. We have Spotify as the number one thing. He sold out of his entire position in Spotify. Now that's a bit surprising. Let's go ahead and take a look at Spotify here. Let me bring it up on Qualtrum. Let's go ahead and take a look at the price action.
I guess what I see here is he's held this company for a while, so he's been invested in it. And I think he bought quite a bit and accumulated more shares around this time period. He was holding it while it was selling off. I I I think he, he thought it was probably worth more than that. And then we had this big rally this year, it's up 112%. So I think that's the reason why I really think he probably just sold it because it went up this year and he looked for an exit with the company.
But I still think that's a bit surprising. Josh Tarasoff doesn't just sell companies to get some gains in them. He typically tries to hold them for 5/10/15 years like he's held Amazon. So seeing him sell out of this company is a little bit concerning to me. I think it's something where if you look at Spotify, he may have came up with a problem with the thesis. When I look at Spotify, I'm
mixed on the company. I think there's substantial potential upside, but there's also too many challenges for the company. They're not only facing against big tech, but they also have a lot of their margins taken by the music labels, and there's just a lot of competition with
podcasts. So with Spotify, I see a lot more competition and a lot more margin problem than I do with Netflix. My bet between the streaming players is with Netflix. Now the next big change was an addition to Markel Group. This is a specialty insurance company. He also added to Brookfield Corp. This is a popular investment. I see it passed around retail investors all the time. Brookfield's talked about like the Canadian Berkshire.
They invest in a lot of infrastructure projects, just like Berkshire owns a lot of utilities and energy. Brookfield is a high quality company that's compounded for a number of years. So this is what his portfolio looks like. He still has the significant bet in Amazon. He's held this company for over 10 years. It's his claim to fame. What he changed was he added more to Brookfield, Markel and Alphabet. So those are the three he added to as well as a little bit more to Burford Capital.
But overall his portfolio looks mostly the same. The only real change here is selling out of Spotify, which after this rally, I don't think is entirely unexpected. I think Josh Tarasaw's portfolio looks good, but ultimately it's not my favorite one. There's some companies that he holds from time to time that I think are questionable. Next up we have Michael Bury, who at this point needs no introduction. So let's go ahead and take a look at his trades this last quarter.
And I'll say the same thing I say every time that we look at Michael Bury's trades. I think there's little value. In fact, I think there's very little in looking over his trades in terms of wanting to mimic them, because I think that Michael Bury overall is one of the most difficult people to actually follow what he's doing, what he's doing with his portfolio. You can't follow him. It's just impossible. I mean, look at the trades he did just in the past three months.
He sold entirely out of dozens of companies. There's like 25 companies that he sold 100% of. So you can't track this. You're not, you're not going to be able to make the same trades at the same time he does. And then he added to another dozen positions. Right now he seems to be making a bet on booking holdings. We bought into that with a 10% position. He bought into Nexstar Media Group.
He also seems to be buying into Chinese e-commerce websites, Alibaba and JD. If there's any common theme with Michael Bury, the one thing I do notice with most of his holdings, especially the bigger ones, is they typically trade at incredibly low valuations. He's a value investor where he tries to buy the companies nobody else wants to touch. So he's buying into Chinese e-commerce companies as they're
doing terrible. Nobody else wants to invest in them and he does the same thing with a lot of companies. So that's really the only commonality is ultra low valuations with this holdings. Next up we have a value investor called Thomas Russo. He manages around $9 billion in assets. But I do like his investing strategy. He invests in companies that have significant cash flows. They typically have very stable business models and he aims for a 12% annualized return.
He's a bottom up investor that likes investing in companies because of their fundamentals and he's also long term. In fact, if we look at his trades this last quarter, this is what it looks like. His single biggest trade is a 1.36% move. That's it. He literally changed almost nothing. Most of these trades are entirely insignificant, less
than .10%. So I like that he's just holding on to his company's changing nothing and doing the thing you're supposed to do, buy into good companies and let them have time to compound. Now let's go ahead and take a look at his portfolio. The type of companies that he buys into. Again are very consistent, high cash flow companies we have at the very top, Berkshire, so that gives them some exposure to Apple by virtue of Berkshire's holdings. That is a 14% position.
So he does have a level of concentration there into his top conviction. Then we also have more Berkshire down here, so another 6% totaling this out to a 20% position. It's a top heavy Ortfolio Next U we have Google, Makes sense, we have MasterCard there. That makes U around fifty of his Ortfolio between these three ositions and then we have Nestle, another very wide Moat
company. After that it starts breaking down into 7% positions and you can see further down the list he has companies like Visa, Comcast, JP Morgan. He has quite a bit of Netflix and after position around 20 he has very insignificant positions. I think he does this by keeping a couple shares of companies that he previously bought into. So this is overall kind of his trading history. But when I look at Thomas Russo's portfolio, I see a very conservative defensive
portfolio. It's mostly concentrated into companies that are incredibly resilient, very wide Moat. So I don't think he's taking a lot of risks with this $9 billion. I don't see anything substantial happening to Berkshire or Google or MasterCard or Nestle. Those are pretty safe bets. I like Thomas Russo's portfolio and I think his performance speaks for itself. He's earned roughly a 13% annualized return. That's difficult to do for a long period of time.
So he has a strong portfolio and a market beating performance so far. His investors should be happy now. That's the update so far, but this is just part one. Make sure you're subscribed to the channel with the Bell notification on so that you get future updates throughout the week. I'm going to be reviewing more and more super investors portfolios and I'm picking out all the top super investors you'll want to know about, so make sure to subscribe. There's more to come.