Inside the Corner - October 2025
Portfolio Update. Is MBB expensive now? What is the underlying profit growth of Investor in 2025? Time to add to winners?
This newsletter is provided for informational and educational purposes only. The views expressed are my own and do not constitute recommendations to buy or sell any securities.
October is coming to an end, and the first snow has already settled over the Norwegian mountains. The topics of this month’s letter will be:
Lessons on Opportunity Cost and Management Alignment
Portfolio Year-to-Date
Key Q3 Results from our Holdings
Where the Norwegian OSEBX and American S&P500 are up 15% YTD, the OMX Nordic 40 in Scandinavia is down 4%. It’s been a tough year for many of Scandinavia’s long-term champions, especially those from Denmark.
However, we still think Scandinavia offers many excellent opportunities. It’s a small world in miniature: Norway brings energy and seafood; Denmark offers world-class healthcare and financials; and Sweden stands as the region’s industrial and technological engine. For our taste, there are many more hidden gems to be found outside these sectors as well (like Finnish saunas or Norwegian Medtech).
1st Lesson: Opportunity Cost
The longer the time horizon, the more opportunity cost seems to matter.
We’ve noticed a pattern of ourselves, one many investors probably can relate to.
Our best ideas never received enough capital, while we continued to add capital to our losers, on the basis that their low valuation provided attractive risk-adjusted returns and that mean reversion in their stock prices would occur one day.So far, that hasn’t worked great.
The positive, is that we’ve avoided trimming or selling our winners, which means our top 10 positions is almost exclusively our winners.
The key lesson for us is to keep an eye on Invested Capital, and placing a limit on how much capital we allow to allocate to one holding, call it a fully built position.
Others may prefer to do this differently, but we think a key risk to our long-term returns is overconfidence in going against the market, instead of continuing to add to our winners. Once that threshold is reached, we can’t add more to that position. It serves as protection against our own ignorance or bias.
To illustrate the potential after just a couple of years: Norbit, a 3-bagger of ours, has only received 4.5% of our invested capital, whereas a loser of ours, Evolution, received 8.5%. Today, their respective weights in the portfolio are 7.5% and 4.5%. Luckily, we never trimmed Norbit — only added new capital to Evolution.
While we think of ourselves as business owners, there is something difficult in our brains buying a stock that has gone up a lot. The lesson with some of our recent winners, like MBB, Medistim and Norbit, is that fundamentals actually have justified their runs. Thus, we should add capital here, rather than adding it to the weakening investment cases, like for example Evolution AB.
Note that we still believe sometimes falling shareprice offer excellent opportunities we should take advantage of. Like we believe with Constellation Software at the moment.
2nd lesson: Management Alignment
Holding onto a stock through tough times, which always come sooner or later, is far easier when three conditions are met from the start:
You understand the business.
Management is aligned and thinks like owners.
They have an exceptional track record.
Why partner your capital with managers who haven’t proven themselves over time, when there are those with decades of disciplined outperformance? Why own companies where executives get paid regardless of performance and might be gone in a year or two, when you can back those who feel the pain alongside you?
Without these three, we would not be interested. And that excludes a lot of ideas, many good ones to, but it improves our behaviour as investors.
Portfolio Year to Date
Year-to-date our portfolio is now up 15%.
The big drivers of return is a double in both Norbit and MBB, and a 70% return in Medistim — all top 5 positions by now. Looking at their quarterly results, we actually find these moves justified. For MBB and Medistim, we’ll take a closer look soon.
We’ve also made a few adjustments recently, most recently selling our position in Momentum Group. At first glance, the decision might seem odd following another quarter of solid high single-digit profit growth. But beneath the surface, organic growth continued to slow, reaching –4%.
In contrast, Constellation Software, another serial acquirer we own, reported +5% organic growth, with a similar inorganic contribution on top. Given that both trade at comparable valuation levels, we find it difficult to continue holding Momentum Group. Despite holding for 9 months, we never managed to add more than 2% to Momentum, due to what we found was an expensive pricetag for their current growth.
We remain open to owning Momentum Group again. We have trust in what Ulf Lilius & Co are building, seasoned entrepreneurs returning to a smaller known stage. They’ll join our other recent sale in Borregaard on our watchlist.
Eurofins entered our top 10 ideas now, a company we did a writeup on recently.
Now, let’s go over our portfolio & the key results from our holdings in Q3 2025. This section is exclusive for paid members.