To my Expanse Readers,
As we close out 2025, I find myself reflecting not just on the year’s returns, but on something more fundamental: what kind of investor I want to be.
This year marked a turning point for the Expanse Stocks portfolio—not because of any single position or market call, but because I finally committed to a principle I’d long understood intellectually but struggled to implement: concentrate on what you believe in, and give those ideas time to compound.
The result is a portfolio that looks different from where we started the year. Sixteen names have become twelve. Diversification for its own sake has given way to conviction-weighted sizing. And the recurring theme is clear: this is a portfolio built around secular trends I believe will define the next decade.
But before diving into where we stand today, let me take you through the journey of how we got here.
Topics I’ll Cover
🔹 The First Half: Strength and Soul-Searching
🔹 The Transition: From Diversification to Concentration
🔹 Lessons from 2025: What I’m Taking Forward
🔹 A Personal Note: Why This Matters
🔐 For Paid Subscribers:
🔹 The Portfolio Today: Twelve Names, Four Themes
🔹 What This Portfolio Really Represents
🔹 The Risks I’m Accepting
🔹 Final Thoughts
🔹 Looking Ahead: Defining “Thesis Breaks”
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🔗 Portfolio Corner - 🗓️ Monthly Updates (Last Update: 26-Dec-2025)
The First Half: Strength and Soul-Searching
When I wrote the 🔗 Semi-Annual Letter in June, the portfolio was performing well. We held quality businesses with strong competitive positions. The moats were real, the management teams capable, and the secular tailwinds intact.
Yet something felt off.
I had built what looked like a well-diversified portfolio on paper: software, semiconductors, consumer brands, industrial tech, healthcare, and financials. Spanning 16 positions plus two spin-offs. It checked all the conventional boxes. But as I prepared for my wedding and our trip through Namibia, South Africa, and Mauritius, I kept coming back to a nagging question: Was I building the portfolio I wanted to own for the next decade, or was I just building what looked safe?
That question became impossible to ignore when I came back home after those weeks away. When you step back from the daily market noise and actually think about where you want to allocate capital for the long term, clarity tends to show up itself.
The thing is, not all quality businesses are created equal. Some companies you own because they’re objectively good. Others you own because they genuinely excite you and because you believe in the thesis deeply enough to hold through 40% drawdowns, because you’re willing to spend weekends reading about their industry dynamics, because you’d happily own them for a decade.
I realized I had too many of the former and not enough of the latter.
The Transition: From Diversification to Concentration
The second half of 2025 was about making tough decisions. I wasn’t dissatisfied with the businesses I owned, most were excellent companies. But I was dissatisfied with my conviction levels across the portfolio.
Here’s what became clear: in a concentrated portfolio, every position needs to matter. If I’m going to own 10-15 names instead of 30, each one needs to represent a genuine edge—a thesis I’ve spent months developing, a business model I understand deeply, a management team I trust implicitly.
This led to some painful exits:
Hermès was objectively one of the finest businesses in the world. Unmatched brand power, generational pricing power, capital-light operations. But I had to be honest with myself: did I want to spend the next decade studying luxury goods? Does it really excite me? The answer was no. It was a great business for someone else’s portfolio, not mine.
Danaher, Atlas Copco, and Investor AB fell into a similar category. Quality serial acquirers with strong track records, trading at what looked like attractive valuations relative to their history. But here’s the thing about “relative value” as an investment thesis: it’s never compelling enough to hold through volatility. When a position drops 25%, you need conviction in the underlying business to add more or even just hold steady. “It looks cheap on a 5-year P/E chart” doesn’t cut it.
The truth is that valuation alone is a weak thesis for a compounder. If a business is truly exceptional, arguing about whether it should trade at 26x or 32x earnings is missing the point. The real question is: will this business compound intrinsic value at 15-20% annually for the next decade? If yes, the entry multiple matters far less than most investors think.
Meanwhile, I was adding to and initiating positions that, on conventional metrics, looked “expensive”:
Intuitive Surgical at what many would consider a premium valuation. But the business model, razor-and-blade recurring revenue from surgical procedures, a dominant competitive position in robotic surgery, and a massive runway as penetration moves from ~12% to potentially 50%+ over the next decade, justified the price. This was about buying durability and growth.
And I substantially increased allocations to my highest-conviction ideas: Constellation Software, ASML, Cadence, Google, and MercadoLibre. These weren’t positions I was trimming for “risk management.” These were positions where, if anything, I regretted not owning more.
Lessons from 2025: What I’m Taking Forward
This year taught me several lessons that will shape how I invest going forward:
1. Conviction Matters More Than Diversification
There’s a difference between owning something because it’s objectively good and owning something because you believe in it deeply. The former might help you sleep at night, but the latter is what generates superior returns.
I’d rather own 8% of my best idea than 2% each of my top four ideas. Concentration forces clarity. It forces me to think harder about each position, to monitor them more closely, to actually understand the businesses rather than just checking boxes.
2. Valuation Is a Weak Thesis for Compounders
I spent too much of this year worrying about whether certain positions looked “expensive” on traditional metrics. The reality is that great businesses often look expensive because the market correctly anticipates years of strong performance.
Constellation Software has looked expensive for a decade (not so much today). ASML, Heico or Amazon have looked expensive for years. If you waited for these businesses to trade at “fair value,” you missed some of the best compounding opportunities available.
The lesson: focus on whether the business can compound intrinsic value at high rates, not whether the current multiple looks reasonable on a historical chart.
3. Position Sizing Should Reflect Conviction
This seems obvious, but it’s surprisingly hard to implement. The natural tendency is to size positions for comfort. Add a little here, trim a little there, keep everything balanced.
But if you genuinely believe in a thesis, why would you limit your exposure? If I think Constellation Software can compound at 18% annually for the next decade with high confidence, why wouldn’t that be an 11% position instead of 5%?
The current portfolio reflects this principle: my highest-conviction ideas are 11-12% positions. My lowest-conviction idea is 5.3%.
4. Only Own What Excites You
This might be the most important lesson of the year. In a concentrated portfolio, excitement equals conviction equals holding power.
When one of my positions drops 35%, will I have the conviction to hold or add? Absolutely. Because I believe in the long-term thesis and I’m genuinely interested in following these businesses.
If I still owned Danaher or Atlas Copco and they dropped 35%, would I have the same reaction? Probably not. I’d be white-knuckling through volatility on positions I added for “balance” rather than conviction.
This is why the portfolio feels right for the first time: every position excites me. I want to read about AI and tech related advancements, M&A acquisition strategies in some of the best capital allocator engines over the last two decades, robotic surgery adoption rates, and fast growing emerging markets fintech penetration.
If you don’t find your portfolio interesting, you’re probably in the wrong businesses.
5. Mistakes of Omission Matter as Much as Mistakes of Commission
I never bought NVIDIA or Broadcom when I had the chance. Not because I didn’t understand them, but because I didn’t act.
These mistakes don’t show up on your portfolio statement, but they’re just as real. They hide in the research you never did, the skepticism that went too far, the ideas you liked but didn’t pull the trigger on.
I’ve started journaling more, keeping files with ideas I almost bought and revisiting them regularly to spot patterns and blind spots. The goal isn’t to beat myself up over missed opportunities, but to understand what held me back and whether those concerns were valid.
A Personal Note: Why This Matters
2025 was a transformative year, not only in my investing style, but at a personal level.
Getting married and traveling through Africa gave me perspective on what really matters in life. It’s not about optimizing every dollar or maximizing portfolio returns at all costs.
Money is a tool, not a goal. Wealth should maximize life fulfillment, not be hoarded endlessly.
That philosophy shapes how I think about this portfolio. I’m 33 and these are some of the most vibrant years of my life. I’m not deferring gratification until some distant retirement. I’m investing wisely for long-term security while also allocating capital toward what matters most—traveling, exploring, learning, spending quality time with family and the people I love.
The portfolio I’ve built reflects this balance. It’s concentrated enough to generate superior returns if the theses play out, but it’s also composed of businesses I genuinely enjoy following. Investing isn’t a chore, it’s something I find intellectually stimulating and rewarding.
If there’s one piece of advice I’d give to anyone reading this: build a portfolio that excites you. Not one that looks safe on paper or checks all the conventional boxes, but one that represents your genuine beliefs about the future and keeps you intellectually engaged.
That’s the only way you’ll have the conviction to hold through inevitable drawdowns. That’s the only way you’ll compound capital at rates that exceed the market over decades.
The Portfolio Today: Twelve Names, Four Themes
As we enter 2026, the Expanse Stocks portfolio is concentrated around four core themes that represent my highest-conviction views on the next decade.