Inspired by Chris Mayer's influential book, “100 Baggers”, the Coffee Can portfolio advocates for the selection of high quality companies, which are then entrusted to the passage of time, shielded from constant tinkering and reactionary market sentiments.

I have written an article that offers a comprehensive analysis of the formation of my Coffee Can Portfolio. On this page I will be keeping track of its performance over time. The first two pie charts compare the original portfolio percentage weightings assigned to each investment in comparison to their current values (share prices taken on 10 June 2023).

The interactive chart below shows the approximate share price return since 01 Nov 2018. This won't tell the whole story as I averaged up in some companies (CRWD) and down in most others.

Rolling Summary

Chart showing Coffee Can Portfolio with initial weightings
Chart showing Coffee Can Portfolio with initial weightings

Further Resources

There are several valuable resources available on the Coffee Can Portfolio approach. Some of the particularly useful articles I have come across include:

  • Robert G Kirby - The-Coffee-Can-Portfolio-1984. This is the original article that outlines the principles around this style of portfolio construction. Kirby is a staunch believer that superior investment research and management can consistently outperform the increasingly popular index investing. He suggests an ultra-long-term buy and hold strategy is one such solution to the higher transaction costs which often wilts away active managers' alpha. Kirby suggests the coffee can 10-year commitment would not only eliminate transaction costs but also improve investment return as you can ignore the month-to-month noise and invest with more certainty when looking years rather than months into the future. Notably, Kirby humorously mentions that he would charge a mere $2 million management fee to establish a $10 million coffee can portfolio as a money manager.

  • Andrew Brown - For want of a coffee can, we left $7 million on the table. Writing for Claude Walker's A Rich Life, Andrew chronicles his investing mistakes and plays the 'what could have been' game. Andrew's sin was liquidating a $45k investment in Magellan Financial Group in 2009. At its peak of $67 per share that position alone would have been worth ~$5.5m. It has now almost round tripped, back down at $8 per share for a value of $665k (still a handy return). Now I am sure there are far more investors out there that would be holding entire portfolios of zero's had they used the coffee can approach. Placing too much emphasis on case studies such as Andrew's might find us guilty of survivor bias.

  • Terrance Odean - Do Investors Trade Too Much. Published in 1998, this journal article by Odean examines the trading patterns of 10,000 accounts. Odean concludes that "over-confidence" leads to more frequent buy/sell activity and demonstrates that higher trading activity results in lower net returns for investors. While this research paper provides strong evidence for adopting a passive investing approach like buy-and-hold, it does not fully endorse the #neversell notion of the coffee can portfolio.

  • John Huber - The Coffee Can Edge. This blog articles starts with the obligatory Buffett quote about buying a good business and then "forgetting about it for a long, long, long time" which perfectly captures Kirby's initial thesis. While many commentators, myself included, emphasize the long-term nature of the coffee can portfolio and its potential for substantial returns, John delves into a crucial aspect: the importance of selecting the right company for the coffee can. John surmises that the vast majority of losses in the stock market come from picking the wrong business, not picking the wrong valuation on the right business. Importantly, the coffee can forces you to focus on the first group of stocks, which will lead to better results over time.
A long-term mindset doesn’t guarantee results, as stock picking itself is the most critically important factor in investment success, but it’s hard to overstate the value in the behavioral edge that can be garnered by even an average individual stock picker who simply ignores the noise, avoids complexity, and focuses on great companies with a long-term owner’s mindset.
John Huber
Saber Capital Management