Transcription
Hello dear friends. My name is Clive Thompson. Today is Wednesday, 31st of December, 2025. It's the last day of 2025. Some stock markets will be open. Most will be closed today.
I've been investing money for 50 odd years, and I've learned a few tricks, and I've made a lot of mistakes. I've had some punches on the nose, and I try not to make those mistakes again, and the tricks I've learned. I'm here to pass those on to you, along with the mistakes, so that hopefully you can become a better investor.
Um, today's video is all going to be about building a portfolio for 2026, and I'll be telling you all about that in a few minutes. But just a little bit of background, uh, for me, I started becoming invest interested in stocks at about the age of 15. Um, I remember I went to the hospital with my mother to see her father, my grandfather, and uh, he had a little exercise book with him, and uh, he turned the pages to show them show me. On each page, he had a list of four or five stocks or seven stocks that he owned, uh, companies like British American Tobacco, Cortals, um, Shell, Pats, and so on. And against each stock, he had the number of shares he held and the share price of that day. Then he'd multiply the number of shares by the share price to get to the total value of that company that he owned on that day. Then he'd add up the column of values of each company to get to the total value of his portfolio. And each day, he'd write down the date at the top of the page. Then he, the next day, he'd turn the page and write down the same list of shares, same number of shares, but different share price, which you would get from the Daily Mail, and different value for each company, and then you'd add up the companies and a different total. And at the age of 15 or so, when I saw this, I was absolutely fascinated. I found it amazing that the the price of each share could change. The total number of shares multiplied by share price gave him the total of that company. That would change, and then the grand total would change. It was, you know, it was kind of like looking at a spreadsheet of today. Now we look at them and say, well, that's normal. Anyone can do it. But it was absolutely fascinating for me at the age of 15. And I kind of wanted to uh play with the same sort of thing uh as he did.
And so I actually made my very first stock market investment at the age of 18 years old. I'm 68 now. So that was 50 years ago, half a century ago, I made my first investment. And that was an oil company. Now, um, it wasn't me who chose the oil company. I, I rang the broker, and he, I'd asked him for a tip, and he said, "Well, I've got this lovely oil company. They found the largest oil field in the world." Now, back then, in 1975, oil companies were all the rage. They were kind of like the um AI boom of today. Everything he wanted to own was oil companies because that was the future of mankind, just like in 1990 or 19, the late 1990s dotcoms. The internet was the future of mankind. Well, back then, it was all to do with oil companies. So when he told me he'd found an oil company which nobody knew about, but which had found apparently the biggest oil field in the world, I thought, you know, this is great. I'm going to be in first and get this amazing oil company. Well, needless to say, I lost 100% of my money on that investment. And the reason I lost all my money was they hadn't found oil. It turned out to be water. And uh, obviously, their sonar or whatever they were using to detect what was under the seabed. This was, they'd found the oil in Venezuela, by the way, apparently, but whatever they used hadn't worked, and it found water instead, which was no use at all.
Um, so in a way, uh, it was a story that I'd been told, and we hear similar stories today. So, for example, you might uh, at some point in the future, hear a story that some company has found or invented quantum computing, which is maybe five times as fast as uh, Nvidia's Blackwell Chip ship chip. And everyone's going to say, "Wow, what a great adventure." They're going to pile in, and then it will turn out it doesn't work. Um, this can happen, and that's what happened to me, and you lose all your money. Um, but why do they, why do companies invent these stories which are not true, or maybe hint at the stories which are not true? Well, quite often, they want to boost the share price. And why do they want to boost the share price? Because the executives, exe, the people who work for the company, the directors and senior management, sometimes they have shares in the company. They've been given that as part of their incentive package. There for working, you know, come and join us, we'll give you a thousand shares, and we'll give you a bonus every year which will comprise some of shares. So they want the share price as high as possible, and the more they can get people interested in the company or excited about the company, the more the share price will go up, and then it gives them opportunity to sell those shares at the highest price. So, you know, one thing I always look at when I'm looking at companies is what are the directors doing with their own shares? Are they, are all of them selling? Are some of them selling, some buying? Or are they buying the shares? Uh, it doesn't tell you anything about the company really, but it's a clue as to the direction of trouble. So, if a company comes out with some amazing new invention, some fantastic product, and you think it's really exciting, go and have a look, find out if the directors are selling the shares, because if it really is as amazing as they say it is, they won't be selling.
Um, so anyway, after this half a century of investing, um, I'm going to share with you tips and mistakes that I've made. Um, but we're going to talk about uh, a portfolio I've built for 2026 called Beat the Benchmark 2026. And um, I do this every year, and I publish on LinkedIn. I've been publishing for a few years on LinkedIn um, the portfolio. So I've done Beat the Benchmark 23, 24, uh, Beat the Benchmark 2025, which is, I'll talk about briefly about the Beat the Benchmark 2025 portfolio, um, so it gives you the sort of feeling for what we're going to get in 2026.
Now, the portfolio I published on LinkedIn at the start of the year, and by the way, I've shared the spreadsheet of this uh portfolio with hundreds, maybe even a thousand people uh who've asked for it, and I've, I've sent it to them. Um, you can also get it on my website, which is clivetompson.com. You don't need to go there now. I'll mention clivetompson.com later in in this video. But the, the Beat the Benchmark portfolio was on the 1st of January 2025, exactly one year ago. It was 40 stocks in which I had invested a theoretical $10,000 US each. So the number of shares, sometimes it wasn't a round number of shares, it might have been 425 and a half shares, multiplied by the share price, gave me exactly $10,000. Of course, I had to, where there were foreign shares, I took at the exchange rate on the 31st of December, or rather, 1st of January 2025, to get to that $10,000. So 40 stocks of $10,000 each made a starting value of $400,000. That portfolio today, 31st of December, um, as of the close of business last night, was worth $578,000. So from $400,000 to $578,000. That's a gain of 44.5%. So this year, 2025, it's done what was written on the tin, as it did in previous years, beat the benchmark. Um, we'll talk about what benchmarks I use in a minute. But, uh, let's just say 44.5% is relatively hard to match, uh, if you have your money managed by somebody else. And by the way, anything I say in this video is not investment advice. I'm not a [snorts] portfolio manager. I'm not a licensed advisor. I don't do any investment advice. Um, I'm talking about my personal investment philosophy. What I think for me, you should get your own advisor.
Now, I started with 40 stocks at the start of the year in 2025, uh, but I ended up with 43. Now, I didn't buy or sell any shares. There was no trading, no changes in any stock. But the reason I ended up with 43 was one of the stocks I started with at the start of the year is called Vivendi. And one of the reasons I put in my portfolio was they had a plan to return value to shareholders by splitting up into four companies. So, Vivendi did in fact split up into four companies, um, and spun off, free of charge, uh, the Canal Plus SA, Havas, Envy, and Louis Hashet Group SA. So, started with one company, I ended up with four, um, there. So, that turned the number of companies I owned in the portfolio from 40 to 43, but I didn't add any money or buy or sell any shares.
Now, what's the benchmark? Well, I call it Beat the Benchmark generically, and it's very much a question of choice as to which benchmark, um, one, one would take. But let's just say for simplicity, uh, uh, and this is, uh, very obvious to you all. I beat the S&P 500. I beat the NASDAQ 100. I beat the NASDAQ Composite Index. I beat the Dow Jones Index. I beat the World Equity Index. I beat the median exchange traded fund which is invested in equities, and I beat the average exchange traded fund in equities. And, you know, if I look at the, uh, ETFs which cover country specifics, um, there was almost no country which I didn't beat. Uh, you know, if you'd had all your money invested in Peru, you'd have done better with an 83% return. If you'd had all your money invested in Vietnam, [clears throat] which neither of which I held, by the way, you'd have had a 65% return, beating my 43. But, uh, you know, you could have easily gone for a company, a country like Thailand, Turkey, or Saudi Arabia, where you'd have lost money in 2025. But just to, um, on my website, uh, on the spreadsheet, there's a long list of country specific ETFs with the performance for the year. But just to name the countries which I beat, and I'll, I'll just run through them as fast as I possibly can, but almost every country in the world is in there. Uh, I beat New Zealand, Philippines, Thailand, Turkey, Saudi Arabia, Israel, Brazil, Canada, Germany, Sweden, Belgium, Switzerland, UK, Norway, China, Hong Kong, Netherlands, Norway, Singapore, Ireland, Taiwan, Indonesia, uh, the All World Equities Index, um, Kuwait, uh, USA, NASDAQ, um, USA Dow, and USA S&P 500, uh, Japan, Australasia, Australia, Far East, um, Malaysia, a, uh, Argentina, Denmark, Qatar, and India. So that's about, basically, just about every, uh, country was beaten by my portfolio, and there were no changes in the portfolio, and it was well and truly published at the start of the year, as it was on previous years, which you can go look up on my LinkedIn, and of course, many of you will have had that portfolio sent to you by spreadsheet. You can also still download it on my website clivetompson.com. I'll say that again later. um, as well as you can get what I'm going to talk about now, which is the 2026 Beat the Benchmark portfolio, which has a variety of uh, different stocks. Some, one or two stocks might be the same, but mostly they're different. Um, obviously, at the start of 2025, I did not know that I was going to beat the benchmark. Um, and it takes a lot of courage for anybody to put up their portfolio, uh, hoping to saying, "I'm, I'm hoping to beat the benchmark." And then they don't, because if you don't, people laugh at you and say, "God, what a fool. Hey, you look how what a useless investment manager is. He put his portfolio up and didn't beat it. You know, could have bought the um, uh, World Equity Index and he'd have done better by doing nothing instead of all that effort." Um, but, you know, I've been doing it for 50 years, and I had a certain hunch that I would do it, as I had done in the previous years. So, I went for it, and luckily nobody's criticizing me. Thank God. Um, but it is uh, a [snorts] risk. I might get ridiculed in 2026 if my portfolio fails to perform well, and there is no guarantee it will perform well, and it's not investment advice either. Nothing. You shouldn't follow my stocks, uh, thinking that I know what I'm doing. I do know what I'm doing, but it doesn't mean to say there I picked good stocks this year.
Um, what worked out in 2025? Let's just talk about the good stocks. Well, obviously Vivendi was a really good stock, cuz I ended up with four companies instead of one. And collectively, those four companies ended up being worth $30,000 compared with the $10,000 I had invested in the one company, Vivendi. Other great performers in 2025 included Micron Technology, where $10,000 turned into $34,000. Rheinmetall, the German um defense company, where $10,000 turned into $28,000, and Siemens Energy, where $10,000 turned into $27,000. And there were plenty of other good performers there. Um, but I had some bad performers. You know, maybe one, one in three companies uh underperformed. In other words, I had less than I started with on one in three companies. Uh, and two of the worst were HubSpot Inc., which is a technology company, and Novo Nordisk, which is a pharmaceutical company in Denmark. Um, those two companies, I would have lost nearly half of the $10,000 I put into each of those. So that's perhaps a very important point. If you look at my portfolio Beat the Benchmark 2026 and think, "I'll pick one stock from there," you might pick the wrong one. I don't, I mean, I guarantee you not all 40 are going to go up. In all probability, half of them or a third of them will underperform the benchmark, and I hope that the other half which does outperform the benchmark will outperform significantly. I don't know if that will happen, but we've got to hope for it.
Um, now let's talk about the portfolio, which you can get on my website clivetompson.com by downloading it if you want. Um, the 2026 Beat the Benchmark portfolio follows the same principles as I did in 2025. It has 40 stocks. Each of those stocks has $10,000 invested in it per stock. So 40 times $10,000 makes $400,000. Um, the portfolio will be revalued to exactly $400,000 at the close of business tonight. If you look at it now, you'll see that it's showing a value of something like $410 or $412,000. And the reason for that was I put the portfolio up on my website um roughly a month ago, and the price has changed. Um, I will reset the value to 31st December closing prices uh sometime in the next 7 days. Um, but you can do that manually yourself, just by, there's a, a section right at the top of the spreadsheet on the top left-hand side where it says starting date. Uh, you'll see a starting date. All you have to do is change that starting date from what it says on the website, which is right on the, on the website, it's saying starting date 11th of December 2025. Just change that date to 31st December 2025, at some point after the close of business, or maybe the 30th, because the markets might be closed, and you'll get the starting prices for every stock automatically in there. Um, let's just go here. I'm just changing that. So I will set, when I get, uh, in a few days' time, sometime next week, I'll set the starting prices to exactly the starting price on the 31st of December. The exchange rates will be set to exactly the starting exchange rate against the dollar on the 31st of December 2025. So that means on the 1st of January 2026, tomorrow, the value of the portfolio will be exactly $400,000. Uh, some shares, or all the shares, will have a fractional number of shares. So it might be, uh, 125.37 shares multiplied by a share price makes exactly, multiplied with the exchange rate, makes exactly $10,000. So the number of shares will be adjusted, uh, in the next seven days to exactly the number of shares which would have made $10,000 as at the 31st of December 2025. And I, I repeat once again, I'm going to have to say this several times because I know people are going to take me to task on this. It's not investment advice. Just because I like these shares doesn't mean to say they're suitable for you.
I'll just move the camera a bit. Just, uh, just. We've got nice scenery outside, if you can see. Turn it a bit there. Beautiful mountains and trees like crystals. Where? Let me move it back a bit. There we go.
Now, I'm going to talk about how I constructed this portfolio, in case you'd like to construct your portfolio using the same principles. Um, one of the instruments I used, uh, to help me on this was a, um, a program which is called Simply Wall Street. You can get a link to that on my website clivetompson.com. And if you use the link, uh, which does not require any credit card and it's free forever, uh, but it's limited to 10 stocks or one portfolio. If you ever want to upgrade, uh, within 30 days, at least of of signing up, you'll get a 30 or 40% discount. The discount depends on what you upgrade to, but the unlimited version, uh, will cost you less than a cup of coffee every week if you decide to use my link. Um, no obligation, of course. Um, but you wouldn't get the discount if you don't use the link. It goes without saying. Uh, but you don't have to pay anything now. You don't have to come up with a credit card now. And it will, if you want to just have a very limited version for a few stocks, it's free forever.
Um, how did I construct it? Well, I was using that, um, program in part, but what I did, I produced 17 lists of stocks, 17 different lists of stocks. So, the, the kinds of lists I produced, um, all of them had two very important features. Uh, and for those two important features, I did use this program, Simply Wall Street. Um, Simply Wall Street gives every company what's called a health co, health score. That's how safe the company is. I'll just adjust the, uh, camera because it's not quite. There we are. That's, that's more. Yeah, it wasn't quite straight there. So, every company's got a health score of up to six points. That means how safe the company is. Um, I wanted a minimum health score of at least three out of six. Obviously, six out of six is much better. Uh, but sometimes you have to make compromises. So, I set the minimum health score to three out of six, but plenty of the companies are much more healthy than three out of six, but three out of six is pretty safe. Zero out of six is risky. I also wanted a growth score. Uh, again, you've got six points for growth. That's growth in sales, growth in earnings, growth in EBITDA, um, growth in various areas. Um, six possible categories of growth. I want at least three good categories. So three out of six means the company is growing in some respect. So it might be growth in sales, might be growth in earnings, might be growth in EBIT, might be growth in some other relevant factor which makes the company more important. Um, so, uh, I wanted a minimum growth score of three out of six as well. So three out of six for health, three out of six for growth, and then I wanted other factors. So what I did, I produced 17 lists of stocks, all of which met those two criteria, but I produced a list of high dividend stocks, low price earnings stocks, low PEG stocks. PEG, that's price earnings growth, that's the price earnings ratio divided by the growth, um, low price to sales, low price to book, um, I wanted high growth in earnings per share. I had lists of high growth in sales companies, companies which had high growth sales. This is all forecast, by the way. Um, I wanted companies where the insiders are net buyers of the shares. I chose, uh, lists of, I had a list of mega-cap companies, of very large-cap companies, of large-cap companies, of medium-cap companies, and small-cap companies. I wanted a list of quality stocks, high-quality stocks, a list of defensive stocks, a list of momentum stocks. Momentum stocks are the stocks which are rising faster than the market. Uh, a list of value stocks, that's stocks which are really, really cheap. Um, and so on. So I produced these 17 lists of stocks, uh, all of which had two important criteria as well, which is a good health score and a good growth score. So they're all going to grow, they're all going to be healthy. Um, but I'm looking for the best companies in these, uh, in these lists. So I'm trying to pick some companies from every one of the 17 lists. Now, keeping in mind I've got 40 companies to choose, I'm picking approximately two, and in some cases three, companies from each of those categories. So I might have, for example, uh, three companies which have got a low price to sales ratio. I might have got two companies which are, um, small cap. I might have got, uh, three companies which could be described as high momentum stocks, and so forth. Um, but having got this long list of shares, of course, you can imagine there's a lot more than 40 stocks which might qualify.
So the next thing, and this is a very important lesson for everybody. One of the things you want to do when you're investing is diversify, because every year something will be performing better than others, and something will be very, um, underperforming. So in some years, large-cap stocks will be performing, as happened last year. In some years, small caps will be performing well. In some years, value stocks will perform well. In other years, growth stocks will perform well. In some years, European stocks will perform well. In other years, Asian stocks will perform well. And some other years, American stocks. Um, and you can see that different types of things perform differently in different years. Some years, perhaps when interest rates are falling, high dividend stocks will perform very well. So, you can find all sorts of categories which will perform well. But for everything which does perform well, there's going to be at least another one which performs badly. So if you have all your assets concentrated in one country like America, or all in large caps, you might do great if it's a good area, but the next year you might be very disappointed because you're thinking, "Well, it worked last year, why isn't it working this year?" Um, but that's why I diversify to the maximum. So in my portfolio, I managed to identify, um, I wanted at least 15 different currencies. I wanted as many industries as I could find, and as many countries as I could find. Um, in fact, there were only four countries which I could have invested in which I didn't find anything which I wanted to buy. The ones I didn't invest in are Finland, Greece, Brazil, and Hungary. I couldn't find any stocks in those countries that I wanted to buy. But overall, if you look at this portfolio, I'm invested in 25 countries and 23 industries. I'm going to show you that on the screen now.
So, here we are. I hope you can see it. That's, um, the 25 countries that I'm invested in. So I'll just read you through those countries in alphabetical order: Australia, Austria, Belgium, Canada, China, Denmark, France, Germany, Hong Kong, Italy, and by the way, Hong Kong and China kind of the same thing, except of course where the business is done. Italy, Japan, Kazakhstan, Latin America, uh, that would be, Oh, I don't know where that is, but, Oh, that's so, um, Uruguay. I think I've invested a company there. Um, Netherlands, New Zealand, Norway, Poland, uh, Poland is the big copper company. Uh, Singapore, South Africa, 3% in South Africa, Spain, Sweden, Switzerland, UK, oh, Uruguay, USA, and that's it. And the biggest, uh, area of investment, um, are these patches here. So, USA 8%, China 10% through Hong Kong, of course, um, and Sweden 8%, and UK 8%. Everything else is 3 to 5%. So that's diversification by country. So you can see, first of all, I've got very, very huge diversification by country. So if one country falls on hard times, I won't have too many eggs in that basket. And if one country really, really does great, just as, uh, for example, Peru did fantastically last year, I hopefully will have money in it. I didn't have any money in Peru last year, but, uh, but hopefully, whatever does best, I might have some money in it this year, given the number of countries I've chosen.
Um, when it comes to, um, uh, currencies, uh, here's the currency mix. You can see there, the biggest currency exposure is USA and Euro. Of course, in Euro, uh, US dollars and and Euro in Europe, we've got, you know, loads, maybe 10, 10, 12 countries I'm invested in. Uh, that's why it's 20% in the Euro and 18, no, 17.5% in the USA. Uh, the, the other one which has got quite a lot, uh, is Hong Kong dollars, because that incorporates, it's 13%. That incorporates both, it's down at the bottom, down there. Hong Kong incorporates both China and Hong Kong stocks. Um, but it's very diversified by currency. There's 15 currencies there. Um, in terms of stock exchanges, we're cross, we're all around the world. Um, let me show you. I won't name the stock exchanges, but there's a lot of stock exchanges there on that chart. That's a stock exchange chart, you know, rate stock exchanges like, uh, Stockholm, uh, Oslo, Toronto, and so forth. And we go to the diversification by industry, which I'll bring up here. So I'm invested in, collectively speaking, 23 different industries. Uh, the biggest interest on this list is 10%. Uh, that's, uh, 10. I've got 10% is software and IT services. The blue on the left-hand side here, I've got 10% exposure to pharmaceuticals, which is everything under the sun, you know, some will be cancer, some will be, uh, coughs and colds, so very difficult. So it's actually very diversified. And I've got 8% exposure to food and tobacco, and I've got 10% exposure to, for the first time, to metals and mining. Metals and mining comprise a couple of gold mining, uh, stocks and a copper mining stock, uh, which comes from Poland. KGHM, I think the name is.
Um, I won't name all the stocks I put in the portfolio here, because it's very easy for you to download it. Um, I might put it in the, uh, comments section for simplicity, so you can actually see it in the comments, and I might put the list of stocks, well, I will, the list of stocks, of course, is on my website. I will publish on LinkedIn as well, uh, as a list. Um, but please, once again, I stress, nothing in this video is supposed to be investment advice. Nothing in the spreadsheets is investment advice. Just because the stock is on my list doesn't mean to say it's going to go up. I'm hoping it will. I think the stocks are pretty good quality. I think they've all got a catalyst. There's always a reason why I think they're going to go up. Obviously, when I was looking through these stocks, um, I'm looking for something which ought to drive the share price higher in the future. Um, you don't always find the catalyst, but I think most of them have got some sort of catalyst, and you'll be able to find that if you study the company yourself. But please, whatever you do, don't assume that because I've chosen these stocks, I'm going to do better than your index. Don't assume that individually the stocks will all go up, because realistically speaking, when you choose a lot of stocks, some will always go down, and, uh, you'll probably pick the wrong one. Uh, but at least it gives you some thought of companies you personally might want to study, and you might want to look at and explore a little bit more.
So, just to finish off, um, you know what to do if you like this video. It's like and subscribe. Um, I will be talking about this portfolio one or two times during the rest of the year to let you know how it's going. Um, you can download the spreadsheet from my website, clivetompson.com. You will need to be running Microsoft Excel under, uh, Microsoft 365. In other words, on a Mac or a PC at home. It won't work in the office because offices have got firewalls to stop you, uh, the live feed of prices usually. And it won't work on iPad. Well, you might get the portfolio on iPad or an iPhone, but it won't be updating automatically. And if you see lots of errors, it's not because my spreadsheet's faulty. It's because you're not running the right version of Excel. You've got to be running the, the, the, the annual payment version of Excel, uh, which is basically Microsoft 365. Um, but that's the one which almost everybody has at home, except a few fanatics who've got the very old version where you bought the disc and kept it forever. That won't work. So, if you've got Microsoft Excel 2016 or 2013, that's not going to update automatically. You won't be able to see the updating prices. And for sure, probably you won't be able to see the names of the stocks either. Um, it depends on how that works for you. But for most people, you'll be able to get that. Um, there is a static version on my website as well, which isn't auto-updating. So if you, uh, are trying to look at it on an iPad or, um, um, an iPhone, you can get the static version, but the prices will be stale prices. So don't rely on them as being up to date.
Anyway, my name's Clive Thompson. Like and subscribe. Thank you very much, everybody. Speak soon.