Q3: 30.6% YTD, investing in businesses at war
Year Return 2024 46.6% 2025 YTD 30.6% Q3 was a negative returning quarter (the worst in a few years) resulting in 30.6% YTD. For the past few years as supply chains have been rattled, trade barriers have been erected, and economies have ebbed and flowed, we have taken refuge largely in vertical market software (VMS) serial acquirers. The reasoning was that they do not require strong economies and they are not sensitive to trade tensions. They grow through inorganic acquisitions and therefore may benefit from difficult macroeconomic conditions since acquirers might be able to acquire companies at lower valuations. However, one counter narrative that has reared its head this quarter, is the idea of AI being able to turn VMS into a commodity. To be clear, I don’t believe this is true and have written about this in the past. That said, markets are voting machines in the short run a...
