I Would Not Sell a Single Share for Ten Times What I Paid
Full Portfolio Update. Every Position. Every Reason.
“If you find three wonderful businesses in your life, you’ll get very rich.” - Charlie Munger
Most people think safety is in numbers. Fifty companies. A little bit of everything. Like ordering the entire menu at a restaurant because you don’t know what’s good.
But look at how wealth was actually built. Sam Walton had one business. Walmart. Elon Musk had Tesla. Bernard Arnault had LVMH. Jeff Bezos had Amazon. They didn’t own fifty companies. They owned one. Or two. And they understood them better than anyone else in the world.
Three excellent businesses are more than enough to do very well in life. The average person rarely finds even one. But if you find three extraordinary businesses that are protected from competition and economic change, that is far more valuable than a hundred average ones. And safer. There is less risk in owning three clearly understood outstanding businesses than fifty big famous ones whose balance sheets you never even opened.
I love focus. I love focus more than anything else.
I own three companies. I would not sell a single share for ten times what I paid. This is every position in my portfolio.
Warrior Met Coal — No change Alpha Metallurgical Resources — Add
These two companies make up close to 70% of my portfolio. If you look at their reserves and resources and value that coal, subtract all in costs and everything else, you end up with truly crazy numbers. It makes absolutely no sense for Alpha to be at $200 per share and Warrior at $90. I did not buy two companies in the same industry because I don’t know what I’m doing. I did it because I couldn’t decide which one I liked more.
If you ask me which is the better business, I would say Warrior. Historically Warrior has had better realized prices and lower production costs. And those costs are still falling. So generally speaking, over a long term, Warrior will generate more cash than Alpha.
Alpha has higher all in costs, some railroad dependency, and a few domestic contracts that are not ideal. Warrior has the edge there. Warrior is the better business, but Alpha could be the better investment. Alpha has something that could cause an explosion in the share price.
Let me explain.
