25.59 % YTD — Buried Bargains Portfolio Monthly Update: A Go-To for Beating the Market
Small Caps, Big Gains: A 6-Month Streak of Outperformance
The Buried Bargains portfolio is up 25.59 % since its inception on January 20th 2025. This means we are beating the S&P by 21 % since inception while experiencing less volatility than the market and outperforming the benchmark in 5 out of 6 months. No leverage has been used, and we have less exposure to geopolitical tensions.
In Undervalued and Undercovered we invest mainly in small caps, as we are finding great opportunities there and our track record so far is incredible. Apart from the outstanding returns of the portfolio, the average IRR of the companies I have written about is 65 %, and the objective of the BB portfolio is to put together the best theses into one concentrated portfolio of around 10–15 names.
Interested in how I accomplished these returns? Keep reading.
Buried Bargains portfolio vs S&P
Monthly returns.
We have been able to outperform in 5 of the last 6 months.
Objectives and strategy.
I am aiming for +30 % annual returns with this portfolio and strategy; so far, we are seeing promising results even in a flat market. This means we must be very exigent about the upside potential our holdings offer (while never forgetting the downside). As a rule of thumb, I want companies that—even with conservative growth forecasts and low exit valuations—can deliver +2 × returns; this would let me achieve +30 % annual returns without relying on market conditions or exuberant growth. I also look for security, whether through tangible assets on the balance sheet or extremely cheap absolute valuations, which should allow the companies we invest in to perform well even in adverse economic environments.
As you are probably thinking, the challenge in achieving these results is finding such opportunities. The model is simple yet not easy to copy. Over the years, as an investor, I have developed multiple strategies and mental frameworks that help me uncover value where others do not—largely because I am willing to do the hard work of diving deep into “unattractive” opportunities the market dislikes, often finding a truly misvalued company. This is a simplification, and I employ various strategies and processes to locate these opportunities that I will not disclose. However, I believe the results speak for themselves
Monthly portfolio update.
Now it is time to review our portfolio and the different holdings we have in it; let’s see whether they still deserve a spot or whether we should seek other opportunities, as I am looking forward to opening up some liquidity for higher-return ideas.
I will discuss returns in dollar terms. Many of our positions have appreciated further thanks to the dollar’s depreciation against the euro and the pound.
On my Substack you can find deep dives and updates on all the companies mentioned, so if you are interested in any thesis and want to read more, search for the full piece.
The remainder of this article—including our exact portfolio positioning and a review of each of the 10-plus companies we own—is available only to paid subscribers (360$ year). Subscribers receive instant updates on portfolio moves and three deep dive theses a month on undervalued companies with multibagger potential; since publication, these companies have delivered an average IRR of 65 %. To make things more interesting, I am offering 20 % off the annual subscription forever to anyone who can tell me Benjamin Graham’s most successful investment (answer the email or send me a DM in substack).
The exact current positioning.