Q3 Portfolio Update: I’m Betting on What Everyone Hates
Current Positions & Watchlist Inside
It’s been one of the more interesting quarters since I started publishing my work. Prices moved, narratives shifted, but the underlying businesses didn’t change nearly as much as the headlines suggest.
I ordinarily don’t like small positions. I like to go in heavy. If I want to invest in a business through the stock market, I want it to become a big part of my portfolio. I do not believe in a little of this and a little of that. Some positions have quietly become cash machines. Others are still misunderstood, priced for collapse. That’s fine and I like when markets stay wrong long enough.
In the sections below, I’ll go through each holding, one by one, and explain what changed, what didn’t, and where the next inflection points might come from — including one new position, one reduction, and one add.
Portfolio Breakdown
Alpha Metallurgical Resources (AMR) — No change
Essentially, when you buy into a coal production company, how it works out is going to depend to a great extent on the price of coal. Your outcome depends more on the price of coal than on hitting geological home runs or avoiding operational mistakes.
When I own a coal stock, it’s because I believe it offers deep value at the current price — relative to its reserves, resources, and long-term production potential. But the quality of the investment also depends on the balance sheet, management discipline, and what the company does with its cash.
At the end of last year, when I looked at coal prices, I assumed Alpha would post a $70–100 million loss in 2025. Instead, the first three quarters came in profitable, and I now expect they will finish the year with roughly $50 million in free cash flow and that’s entirely due to management execution. They squeezed costs relentlessly, quarter after quarter.
Even though the share price climbed this year, it’s not a big move. Many investors focused on Warrior Met Coal after its Q3 results triggered a 20% jump in one day. But what most don’t understand is that Alpha’s share price shouldn’t rise — it should stay depressed. A low price allows the company to buy back stock at bargain levels.
Alpha is a long game. A few strong quarters of buybacks at depressed prices could become extremely rewarding later on. And I like Alpha a lot. Why? Because the odds strongly favor much higher metallurgical coal prices from 2028 onward. On top of that, I believe the downside is the smallest of any position in my portfolio — which is exactly why it’s my largest. I want to be the last shareholder standing in Alpha. The only portfolio change here is structural, as my Alpha shares are no longer held at a broker. I’m now officially registered as a direct shareholder of Alpha Metallurgical Resources.
“In the end, what counts is buying a good business at a decent price, and then forgetting about it for a long, long time. Some people can do it and some people can’t.” — Warren Buffett
