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- The portfolio is up 58% in one year
Dear Investors,
The Extraordinary Companies portfolio is 4.77 years old.
I’m not even going to try and work that out in months.
We’ve added some stocks, let’s take a look.
Portfolio performance
What did we buy
Conclusion
Cheers!
Portfolio performance
Over the past year the Extraordinary Companies portfolio is up 58%.
That is both shockingly good news and surprising since we held a large position in Novo Nordisk, which was down 44% in 2025.
Here is the 1-year performance graph for the Extraordinary Companies portfolio.
Extraordinary Companies portfolio 1-year performance
What did we buy
Last week we bought Visa and Mastercard for the portfolio.
But that’s not really new. They were already in the portfolio.
Hey, who says you can’t buy more of a good thing?
Basically, we doubled our holdings in each of those stocks. (Maybe we should have bought more while they were cheap - they were both up 4.5% in a week).
Why did we buy them?
A long time ago, I made the case that they are extraordinary companies (here). In summary Visa and Mastercard have a huge competitive advantage over other payment companies due to the size of their respective networks. They are able to capture more value than smaller competitors, while making attacks on their market share very costly. This allows them to maintain a duopoly.
Also, they were cheap. Well, not really cheap, but cheaper than usual.
The graphs below show the price to earnings ratio and price to cash flow ratio for each company.
Mastercard’s average PE ratio is 39 and the stock was selling for 30 when we bought it.
Mastercard P/E and P/FCF ratio
Visa’s average PE ratio is 32 and the stock was selling for 28.6 when we bought it.
Visa P/E and P/FCF ratio
So, as I said, not cheap but cheaper than usual. And not new to the portfolio but also new.
Conclusion
You might be wondering, why is the portfolio performance surprising? Don’t you check how it’s doing?
Nope, not that often.
Why not?
Because if you check stock prices all the time, you freak out whenever prices go down. That leads to bad decisions. You can’t make a good investment decision when you are in a price-induced panic.
Let’s take the ongoing wars in the middle east. The portfolio took a major dip in March 2026. Checking the news and stock prices would have created a temptation to sell.
But in April 2026, the market went up almost vertically. If we had sold, we would missed that entire rally.
Remember - you have to be in it to win it.
Buy good companies. Stay invested. You’ll do fine.
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