| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Peterson Investment Fund I delivered a 63.8% net return in 2025, bringing cumulative returns to 524% since inception in 2011, or 13.7% annualized. The fund operates as a concentrated, long-term value strategy focused on infinite compounders - exceptional businesses capable of compounding intrinsic value for many years. Core holdings include Alphabet, Berkshire Hathaway, Alibaba, Naspers, and Daily Journal, each selected for strong balance sheets, durable competitive advantages, and aligned management teams. The strategy employs Structured Value techniques to improve entry prices through disciplined options implementation and utilizes the Titan Strategic Income Fund to generate returns on cash reserves while maintaining liquidity. Key return drivers in 2025 included Alphabet's AI-driven operating leverage, Alibaba's market recognition as a dominant technology competitor, and Naspers' buyback-driven discount compression. The manager emphasizes that while 2025's exceptional performance illustrates the portfolio's potential, the focus remains on process-driven compounding through full market cycles rather than quarterly performance optimization.
A concentrated portfolio of exceptional, cash-generative businesses purchased at meaningful discounts to intrinsic value can compound capital at superior rates over long horizons through disciplined implementation and patient holding periods.
The manager expects continued market volatility and dispersion beneath index-level stability, creating opportunities for disciplined value investors. AI disruption will reshape workflows but requires patience for implementation. The portfolio is positioned for multi-year compounding through concentrated ownership of world-class businesses supported by structured implementation and cash management systems.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Mar 10 2026 | 2025 Q4 | BABA, BRK.B, DJCO, GOOG, NPSNY | AI, Capital Allocation, China, Compounding, Concentration, technology, Value Investing | - | AI is viewed as economically consequential and transformative, improving product quality and expanding monetizable surfaces across platforms like Alphabet's ecosystem. However, adoption is constrained by computing economics, implementation friction, and infrastructure limits. The manager emphasizes that profits will accrue where unit economics are defensible and workflow integration is structural. Google Cloud is highlighted as scaling into enterprise infrastructure with improving profitability and durable growth potential. The manager tracks Cloud for margin expansion and conversion of contracted demand into revenue, viewing it as a key component of Alphabet's multi-platform compounding story. Share repurchases are emphasized as a key capital allocation tool across multiple holdings. Alibaba returned $12 billion in buybacks reducing share count by 5%, while Naspers' buyback program has reduced free float by 28% and driven NAV accretion. The manager evaluates buybacks based on accretion to per-share intrinsic value. Alibaba is positioned as a structural toll bridge inside digital commerce where merchant supply, consumer demand, and logistics throughput reinforce each other. The manager focuses on scale-based unit economics and market share stability in core commerce platforms. |
| Oct 16 2025 | 2025 Q3 | BABA | Alibaba, Artificial Intelligence, Compounding, Structured Value, Value Investing | BABA | Peterson emphasizes its long-term, concentrated value-investing approach, supported by an in-house AI research platform, VeritasAlpha, which accelerates fundamental analysis of U.S. public companies. The funds major gains were driven by large holdings like Alibaba and Alphabet, using structured value techniques and options to enhance returns. Peterson sees AI as a structural advantage for research efficiency and capital deployment in compounding strategies. |
| Jul 14 2025 | 2025 Q2 | - | capital preservation, Compounding, Concentration, dislocation, value | BABA | The letter emphasizes disciplined value investing focused on capital preservation, downside risk control, and long-term compounding. Management highlights dislocations in global equities, particularly where sentiment obscures cash flow and asset value. Concentration and patience are central to achieving superior long-term outcomes. |
| Mar 31 2025 | 2025 Q1 | BRK/A | - | - | |
| Dec 31 2024 | 2024 Q4 | BRK/A, DJCO, GOOG, OXY, SRG | - | - | |
| Jun 30 2024 | 2024 Q2 | BRK/A, DJCO | - | - | |
| Aug 3 2024 | 2023 Q4 | DJCO, SDC, SRG | - | - | |
| Jul 19 2023 | 2023 Q2 | - | - | - | |
| Apr 17 2023 | 2023 Q1 | - | - | - | |
| Mar 15 2023 | 2022 Q4 | BAC, CYTH SW, DRTT, HBI, IEP, INDV, SRG | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
BuybacksShare repurchases in 2024 and 2025 hit consecutive records as companies raced to meet Tokyo Stock Exchange capital efficiency mandates. Buybacks were a primary driver of the market's 20% climb in the first half of FY2025. |
Share Repurchases Capital Efficiency TSE Mandates Shareholder Returns Records | |
CloudAmazon's positioning to benefit from both infrastructure and application layers of AI is highlighted. The company's logistical prowess represents one of the foremost moats in business and will be enhanced with AI through better orchestration of logistics assets and buildout of more sophisticated robotics. |
Infrastructure Logistics Automation Efficiency Coordination | |
E-commerceSeveral investments in e-commerce leaders across Asia and Latin America, including MercadoLibre, Sea Limited and Alibaba, faced a more competitive operating environment during the period. As long-term investors, SGA observes that competitive intensity in these markets tends to ebb and flow over shorter time horizons, with market leaders typically emerging from such periods with strengthened strategic positions given inherent network effects. |
Marketplaces Competition Network Effects Asia Latin America | |
| 2025 Q3 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
Value Investing |
||
| 2025 Q2 |
ValueThe manager continues to find attractive value opportunities despite expensive markets, purchasing undervalued companies like Centene, GlaxoSmithKline, Carrefour and PayPal trading at low multiples with strong fundamentals. |
Undervalued Low Multiples Contrarian Opportunistic |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 16, 2025 | Fund Letters | Matthew Peterson | BABA | Alibaba Group Holding Ltd. | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | NYSE | China, compounding, e-commerce, Options, technology, value investing | Login |
| Jul 14, 2025 | Fund Letters | Matthew Peterson | BABA | Alibaba Group Holding Ltd. | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | New York Stock Exchange | buybacks, China, cloud, ecommerce, Regulation, valuation | Login |
| TICKER | COMMENTARY |
|---|---|
| BABA | Alibaba was a detractor during the quarter after the company reported mixed fiscal Q2 results. While cloud revenue growth accelerated and margins remained stable, the core commerce business struggled with slowing growth and significant profit pressure, particularly in the quick commerce segment where heavy investment and intense competition led to a sharp decline in profitability. |
| BRK.B | Berkshire remains a cornerstone holding because it is a permanent capital system built to compound per share intrinsic value through cycles. Disciplined insurance underwriting creates float that can be invested over long horizons, while a diversified set of operating businesses generates durable cash flows that management redeploys with unusual rationality. Berkshire's 10.9% return in 2025 reflected steady per share value accumulation, supported by profitable underwriting and the management of its record $382 billion cash balance. |
| DJCO | Daily Journal is a microcap where we must earn our keep as analysts. We own it as a government-embedded software business, Journal Technologies, paired with a long-standing capital allocation culture. The core product is mission-critical judicial infrastructure, case management, e-filing, and related workflows that sit directly inside courthouses and justice agencies. DJCO's 14.2% decline in 2025 occurred despite fiscal 2025 revenue rising 25% to $87.7 million, driven by continued momentum in the Journal Technologies software segment. |
| GOOG | From the moment OpenAI hit the scene with ChatGPT 3.5 in the Fall of 2022, Google was a perceived loser and thousands of pontificators warned about the end of search. Fast forward three years and this was Google Search's fastest quarter of revenue growth since Q1 2022, when the reopening and pandemic were still considerable drivers of results. In parallel with the Search re-acceleration, Google has also emerged as a leader in AI itself. This combination has been potent for Google's stock and could not have opened on Search alone, given the terminal value fears. |
| NPSNY | We view Naspers as a structural arbitrage. It provides look-through ownership of premier technology assets, most notably Tencent, while trading at a steep discount to Net Asset Value (NAV). Management's open-ended repurchase program launched in 2022 and has reduced the free float of Naspers by 28% and driven more than 20% accretion in NAV per share. Naspers' 52.3% split-adjusted gain in 2025 largely reflected buyback-driven discount compression. |
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