2Q25 Portfolio Review
After every quarter, I provide a review of the performance and positions of my two personal accounts (IBKR and Argentina). I think this provides readers with more context and transparency about the way I think and act as an investor myself. Most of the names on which I have positions have been covered in the blog. This article reviews 2Q25.
The article is organized by account, posting the historical returns, 2Q25 returns, sources of the quarterly returns, the changes in positions during the quarter, and finally the ending positioning.
Before beginning, I wanted to thank all of Quipus Capital readers for your support, especially the ones that have upgraded monthly or yearly. The blog has more than 1,200 followers. Writing and researching for Quipus is a great pleasure.
Disclaimer: The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.
Small announcement: AMA at the end of July
I’m going to host an AMA at the end of July for all paid subscribers.
The idea is to chat more expansively about the articles, industries, companies, or anything else (that’s why it’s an AMA).
I will send another email to paid subscribers this week with a form to find the best time and format.
Thanks to Valley Falls for (another) great idea on how to improve Quipus Capital.
IBKR account Q2
Q2: -2.12%; YTD: -0.14%; 1Y: 0.08%; Since inception (Jan22): 107.9% (CAGR 23%)
Historical returns
The first image below shows the performance of the account by month and quarter (“U91..” column) compared to three benchmarks (SPXTR, EFA, and VT). The second image shows the same comparison in chart form, ending in Q2.
Return sources for the quarter
The quarter had a lot of volatility because of the trade war in April and May, but the aggregate and sector specific results were not very different from 1Q25.
The US apparel sector was a net detractor (-1.52%). I sold ANF after 1Q25 at approximately breakeven after the trade war fears were reduced. The same did not work for G-III or PVH, with similar results but worse stock performances. PLCE on its turn added most of the losses (almost -3%) because of the combined effect of the trade war and bad results in 1Q25.
There were no important price or developments in other sectors.
Changes in positions
Below, I describe the changes in positions I made during Q1. Increase means adding to a position I already held, Add means initiating a new position, and Close means finishing a position I already held.
Add JBS, BOLSY and PINFRA: I opened small positions in these companies, in order to start adding over several months or quarters. The idea is to start building a base of quality name positions where I don’t care that much about the quarterly movements, but rather long-term capital returns.
I wrote about JBS (now about 3% of the IBKR account) in the Latin American Food Overview, about BOLSY (1.75% of the account) in the Brazil Capital Markets Primer, and about PINFRA (2.7% of the account) in the Mexican Industrials Overview.
Close AFYA: AFYA could be considered a long-term quality name like the above, if it weren’t for the fact that I believe eventually the doctors education market is going to take a big hit in Brazil (see my Brazilian Education Primer). Therefore, as it appreciated closer to recent highs, I closed the position for a small gain.
Add ERII: Similarly, I’m starting to dip my feet into the more tech/growth style, with one small position (~1.5% of the account) in ERII. ERII manufactures a high margin line of pressure exchangers used in desalination plants around the world. The company spends part of that profitability in new R&D ventures, mainly pressure exchangers for water treatment and CO2 refrigeration. The chances of those new verticals working are low, but the underlying profitability from desal is good enough, and the optionality exists on the other verticals. I wrote about it on Seeking Alpha.
Increase to GIII and PVH: I bought shares of these two companies after they presented 1Q25 results (added about 0.5% to each), because they trade at very low multiples of guided and FY24 earnings. Although there is a big chance that the multiples are deserved because the American consumer might deteriorate significantly in calendar 2025, the stocks already discount that result.
Maintain PLCE: I did not add to PLCE, but did not sell a portion of the shares either. 1Q25 results were very bad on the topline and gross margins, and the name could easily be considered a short rather than long candidate. In retrospect I should have been much smaller on PLCE (or sold tactically when the name went to $18 a few weeks after I bought at $9). However, the name has one asset: the owner-management team has a lot of skin in the game, and besides from the topline, I like what they are pulling off.
Close ANF and SKX: Despite presenting results not too different qualitatively to GIII or PVH (with the exception of a very fast growing Hollister), ANF’s stock ballooned 20%+ at the open after 1Q25 results. I thought that the valuation was already much more fair (teens multiple of guided earnings) considering the uncertainty around the US consumer, so I sold the entire position in the IBKR account and Argentinian account, at approximately breakeven. I closed SKX after the Trade War started, because it was a small name and added to my mental load at the time.
Short ACQ and DBI: Also trying new things, I shorted a small amount of both ACQ (0.5%) and DBI (0.5%). These are companies also exposed to the US or North American macro, but with much worse operations, and not as discounted as the two names above. I’m new to shorting and I understand that shorting low-quality small caps is very risky, specially if they start to move together as a factor.
Increase ALPEK: I continue to add to this Mexican Chemical. It trades at 3/4x multiples of cycle-average earnings, based on a terrible outlook for petrochemicals into 2027, but is not very levered and is still profitable. I did not add to Orbia because Orbia’s position is a little less discounted.
Short GGAL : I came and went with this short, which is a vehicle for a negative view about the Argentinian bubble. I originally shorted about 5% of the account November 2024, a trade that worked until I added too much just before the IMF loan to Argentina. The post-loan rally really hurt me, and I closed the position, but months after the loan, Argentina’s problems have become more acute, and prices did not move up no matter how ‘good’ the new thrown at them. I initiated the position at a larger weight, but plan to keep a tight stop loss. I wrote about Argentina in April 2024, and my view has barely changed since. Argentina is maybe the most predictably cyclical market in the history of the world.
Aggregate positions and exposures
I maintain a mostly uninvested book, at about 45% long, 15% short, and 60% cash. Without the shorts it would still be 53% cash. The reason, as commented in previous quarters, is that I haven’t found plenty of convincing things to invest in, or that the names I have (with the exception of the quality names I’m starting to build up, or chemicals which are already big), are not so high conviction.
Argentina account
Q2: 27%; YTD: 33%; Since inception (Oct20): 326% (CAGR 29%)
As always, I must warn that the returns on my Argentinian account are harder to calculate (my broker in Argentina provides only terrible and broken excel reports in Argentinian pesos, requiring a lot of cleaning and conversions to USD).
Further, the investable universe is much smaller (only Argentinian stocks and a few hundred depositary shares from abroad), and I have an incentive to remain fully invested because of inflation or the risk of holding USD cash in a non US jurisdiction.
Finally, the Argentinian account is now about 50% of the IBKR account, as I don’t add to it, but rather take from it to pay for expenses.
Still, at least for the quarter and the year, given that the positions and weights for the year have been reported for 3 quarters already, and that the account has minimal turnover, they are more easy to confirm.
The returns came from two sources: EEM and Brazil.
Reduce EEM: On the one hand, EEM, which was about 60% of the account at the end of 1Q25, appreciated close to 10% during the quarter. As said in previous quarters ‘EEM is a placeholder position, which I saw as carrying low risk because of its historically depressed prices. I have it until I can something to put the money into.’ This is becoming harder as EEM appreciates, but I really don’t know where else to park the money. As seen below, from a cyclical standpoint EEM doesn’t look so nice anymore. At the end of the quarter, EEM represented 50% of the account as I sold in order to pay expenses, and the other positions grew faster.
Maintain BSBR, LREN3, XP: These three names did very well during the quarter. LREN3 and XP almost doubled, following the general positive quarter for Brazil. I have become less enamored with BSBR or LREN3 at these prices, but again I don’t know what else to do. I continue to think XP is good value, even at these prices. LREN3 now makes up 20% of the account, XP 12%, and BSBR 7%.
Close ANF: At the same time as I closed the ANF position in the IBKR account, I closed the position in Argentina.
Add PAGS: After analyzing the Brazilian Payment Processors, I considered that PAGS was sufficiently cheap for a position, despite the long-term challenges. This is not a ‘quality’ position, and represents 7% of the account.