Jackass of All Trades

 Whatever style or method of investing you chase, there's one law of the market you can't escape. At some point, you'll look like a jackass. This may be a lot of the time.

Lamplighter invests in a wide range of companies. It organizes its portfolio on qualitative lines rather than strictly by industry, market or style. This brings the benefits of diversification. It also diversifies the ways that it looks bad. Low oil prices, geopolitical risk, customer flights and dubious acquisitions all landed body blows to the portfolio this year. Here are some of the 2025 lowlights.

Low on energy

Lamplighter's biggest miss this year was in Cheniere Energy. Shares fell 11% through mid-December. Investors saw the price of oil drop and the price of natural gas rise. They looked out and saw oil prices staying low for at least the next year. They saw China’s rampant energy build-out use nearly every energy source but natural gas. They figured this would dent a company that exports natural gas.

Cheniere contracts almost all of its business. Contracts run for five to 20 years. Price changes for natural gas or for oil in any year impact its results very little.

Instead, its revenue popped 29% through September. Earnings rose 7%. Management expects this year to be a trough for earnings growth. They have a track record of being spot on when it comes to seeing how their business plays out. The first in a series of new facilities that will add capacity and already have contracted customers should open in the next month or so. There’s reason to expect growth to pick back up.

If the market is right, customers would start breaking contracts and utilities would wind down LNG plant construction. If Lamplighter's right, Cheniere’s new plant will come online soon, its customer book will keep expanding and its economics will keep steady.

Help wanted

Lamplighter fell flat with Criteo too. This one hurt for particular reasons rather than hand-wavy vague ones like Cheniere. Criteo lost its biggest customer for its "growth" business at the start of the year. This came on the heels of a CEO transition. Not the smoothest handoff. No wonder investors ran for the exit. Shares fell 50%.

Revenue still grew, though. It grew by just 2%, but that's something. It had some business wins too. It'll be the first provider of ads through Google to brick-and-mortar retail shops. The business still generates a lot of cash, enough to purchase 15% of its market cap back this year. It'll have enough to do that again next year.

If the market's right, Criteo would see more customers exit, a lot more customers. If Lamplighter's right, at Criteo's price today, it could also lose some customers and still justify the investment. If it gets any traction at all, that will just add to the investment case.

Return to sender

Inpost mailed it in this year too. It runs a parcel pickup service mostly pickup locations in Poland, but in France and the UK too. It made a big acquisition in the UK this year to try and juice its presence there. It bought another operation in Spain. It burned through more money this year in its non-Polish operations than it did in 2024. The glum consumer climate in Europe added to the haze. Investors had none of it.

And, just like Cheniere and Criteo, Inpost's operations were fine. Revenue up by a third. Earnings up 20%. Cash from its Polish operations jumped 13%, more than covering spending in its other regions. As it brings its other regions up to speed, these ought to flip and begin sending cash back. Lamplighter expects it won't take investors too long to figure out the value in the shares then.

If the market's right the mergers will flop, the international operations will keep burning cash and the company's Polish operations will start to falter. If Lamplighter's right, Inpost's Polish operations will continue humming and it'll be able to get the economics on its newer adventures up to snuff or shed them if they don't work out.

Pin the tail on the donkey

Cheniere, Criteo and Inpost tally Lamplighter's biggest "L"s for 2025 (unless something changes dramatically in the week or so, always a possibility). Rather than Lamplighter missing wildly on the business side of each of these, its misses were on how investors would view their results. Results ranged from “fine” to “room for improvement.” Those results, though, against bigger, scarier investor feelings meant shares dropped.

The losses hurt but only dragged the portfolio back by about 3%. While Lamplighter was wrong about how investors would feel about these companies this year, the things that it was right about — business results — matter much, much more to long-term performance. Investors like to talk about making asymmetric bets — ones where if you lose, you lose a little and if you win, you win a lot. It’s a feature that's built into the process and, when it works, this is what it looks like: looking wrong a lot of the time, being wrong some of the time, making the times that you're right the ones that matter.

Disclaimer: None of this is investment advice. It's meant to illustrate ways LCM thinks about investing. Things that LCM decides are good investments for LCM and its clients are based on many criteria, not all of which are covered here. Some or all of LCM's ideas may not be suitable for other investors. LCM does not recommend investing either long or short any position mentioned. LCM may own positions in some of the companies mentioned. Some of its ideas will lose money — investing entails risk. See full disclaimer here.