Watchlist Update - Q4 2025
Overview
This website is a long-term project that I began 5 years ago—one where I gradually build a universe of truly wonderful companies.
Each year, I study at least 50 companies, focusing on businesses with durable competitive advantages, strong financials, and capable leadership. Those that meet my standards are added to this universe and tracked closely on the site.
The complete list of companies that I have deemed ‘wonderful’ can be accessed here.
While this is a fun and educational endeavor, there is a very real objective behind it: to identify these businesses when they are trading at compelling valuations.
In my view, it’s not enough to simply own a basket of good companies. Over time, that strategy tends to produce market-like returns, which an investor could achieve with far less effort by owning an ETF like VOO. Beating the market requires a deeper discipline: identifying businesses when they are trading at compelling valuations.
This week, I updated my watchlist and selected 10 companies from the universe that I believe are currently trading at attractive prices. Below, I present the case for each.
It’s worth noting that companies of this caliber rarely trade at discounted valuations unless something has gone wrong. For investors who aren’t purely quantitative, the key challenge is determining whether the issue is temporary or structural.
One defining trait of exceptional businesses is that their setbacks are often temporary—even when they appear severe at the time. Having previously invested with a deep-value mindset, this is something I’ve come to appreciate deeply about high-quality companies. I find the hit rate to be higher—and the process behaviorally easier—when betting that a historically excellent business will overcome a setback than when betting that a poor business will overcome its challenges. While there is certainly alpha to be found in “bad” businesses (i.e., cyclical, no moat businesses), that game demands a level of insight that is difficult to achieve through public filings and internet-based research alone.
With that context in mind, what follows are the results of my latest watchlist update and a closer look at ten opportunities from the list that I think are very interesting.