Portfolio Update March 2026
Another month, another Portfolio Update.
How do our stocks perform? And which companies are the most attractive right now?
Let’s dive in right away.
Crazy Mr. Market
Do you know how Warren Buffett performed just before the burst of the dotcom bubble?
In 1999, Berkshire Hathaway was down 19.9% while the S&P 500 increased by 21%.
This means he lacked the index by 40 (!) %.
People where asking whether Warren Buffett had ‘lost his magic touch’:
Over the next few years Warren Buffett massively outperformed the index:
The lesson in here?
Every active investor will face periods of over- and underperformance.
The honest reality is that quality faces a challenging time right now.
During times like this, you should do two things:
Keep your head cool
Stick to the plan
I think some investors are becoming very paranoid nowadays.
Mr. Market continues to be very fearful of anything he thinks AI might disrupt.
Walmart versus Nvidia
Do you know what’s crazy?
Fear is driving investors into “AI-proof” businesses.
Walmart and Costco now trade at higher P/E multiples than NVIDIA.
Here’s what their Forward PEs look like:
Walmart: 46.1x
Costco: 53.7x
Nvidia: 39.9x
Fear makes you want to follow the herd.
But overpaying for Walmart or Costco could be a big mistake.
Even the best company in the world can be a bad investment if you pay too much.
Here’s some advice from The Oracle of Omaha (Warren Buffett):
Sometimes Mr. Market is euphoric. He only sees the good and names a sky-high price.
Sometimes he’s depressed. He only sees doom and names a rock-bottom price.
The best part?
He doesn’t mind being ignored.
You don’t like his price today? Ignore him and he’ll be back tomorrow.
This also means the more manic-depressive his behavior, the better for you as a rational investor.
Our Portfolio
Fundamentally, our businesses are doing great.
Our companies are healthier than the ones in the S&P 500.
And this while the performance hasn’t been good recently.
The intrinsic value of our companies have grown by nearly 20% (!) per year.
Almost every company we own is undervalued right now.
Why?
Because the market is afraid of a lot of things right now:
AI disruption
Changing tariffs
The return of inflation
Wars and geopolitical tension
I’m sure that some businesses will be disrupted by AI or inflation.
But I feel very confident that Our Companies will be fine.
Why?
Because we own companies with durable competitive advantages.
The expected return of Our Portfolio has never been higher as today.
Just think about it for a second…
Our companies are fundamentally way healthier than the index
Our companies are cheaper than the index
The current Forward P/E for Our Portfolio equals 17.1x.
This means the earnings yield is 5.8% (100/17.1x).
Terry Smith says there is an easy rule of thumb to calculate your expected return:
Your expected yearly return = Expected EPS growth + Earnings yield
Your expected yearly return = 12% + 5.8% = 17.8%
An expected yearly return of 17.8% would be amazing.
This would mean you double your money every 4 years.
But which stocks offer the most upside potential today?
Let’s dive into a full portfolio update.
