2026-06-03 Portfolio Update – APO, ARES, BN, BX, HTGC, OWL, PSUS

Put in $2000, then purchased (with over $1000 dividends):

• $300 for APO

• $400 for ARES

• $300 for BN

• $500 for BX

• $547.44 for OWL

• $500 for HTGS

• $500 for PSUS

Not much in the alternative asset managers space except that redemption of the Blackstone flagship private credit funds hit the redemption limit (news). The public market for software companies seemed to be bottoming during the last few weeks. It might help the alts to stabilize, but funds raising would take some time to re-accelerate. I still had a lot of confidence in the alts industry and I just kept buying more.

In the meantime, I started a position in a business development company (BDC) called Hercules Capital (HTGC) that has 35% of its loans exposed to the software industry. It's definitely a big contrarian bet given the market sentiment, but I saw this as a pretty attractive opportunity to invest in this internally managed BDC trading at ~12% dividend yield and around 8x P/NII (net investment income). Although it's trading at a premium to book at around 1.27x P/NAV, its exceptional return on equity at over 15% gave me a lot of comfort. Because it can engage in credit fundings which also come with warrants, the upside from the equity often is more than enough to cover any usual credit losses. I will have a writeup for this company soon.

I also started a position in Pershing Square USA, Ltd (PSUS). It's the new Bill Ackman's investment vehicle that is trading at a 20% discount of NAV. I admire Bill Ackman and I saw this as a good opportunity. It had yet to deploy the capital from the IPO, and I foresaw Bill Ackman can take advantage of the recent weakness in quality companies to earn a good return for some stock picks. I expected to invest more into PSUS if it continues to trade at a 20% discount to NAV. I published a writeup recently.

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Recent and upcoming dividend distributions

Portfolio performance snapshot

Total return:

One-year return:

Portfolio IRR (calculation): 17.98%

Approximated IRR for an SPY-only portfolio: 20.05%

Individual holdings:

Breakdown by categories (real-time):

Total returns for individual holdings:

Last prices:

Portfolio holdings conviction

The convictions in the table below reflects my current opinions and will guide the future contribution of additional investment to existing holdings. Stocks not inside the table are stocks with subpar return on equity that will be very unlikely to receive more contributions from new money (there can be exceptions for very cheap stocks). All of my writeups can be found here.

Stock	Conviction in long-term prospect	Valuation	Price
XYZ	weak	neutral	$69.80
PYPL	weak	undervalued	$42.61
META	moderate	greatly undervalued	$622.98
BRK.B	strong	neutral	$475.37
AMZN	strong	neutral	$250.02
PLTR	moderate	greatly overvalued	$142.20
OWL	strong	greatly undervalued	$9.69
APO	strong	undervalued	$124.35
ARES	strong	slightly undervalued	$123.10
BN	strong	slightly undervalued	$43.88
BAM	strong	slightly overvalued	$45.25
BX	strong	slightly undervalued	$110.28
MAIN	strong	neutral	$50.71
BABA	moderate	neutral	$127.21
NNN	moderate	neutral	$44.19
TSLA	moderate	neutral	$423.70
BIDU	moderate	neutral	$132.68
NVDA	moderate	slightly undervalued	$214.75
TSM	moderate	neutral	$436.69
HASI	moderate	neutral	$40.13
HHH	moderate	slightly undervalued	$63.43
UNH	moderate	neutral	$377.00
HOOD	moderate	overvalued	$82.85
MCD	moderate	neutral	$273.29
HTGC	moderate	slightly undervalued	$15.22
PSUS	moderate	slightly undervalued	$38.23

Conviction in long-term prospects means how much I believe a company would match or outperform the market (e.g. S&P 500) in the long run. Valuation matters so the conviction generally corresponds to the neutral rating of Valuation. It has the following ratings: weak, moderate, strong

Valuation: greatly overvalued, overvalued, slightly overvalued, neutral, slightly undervalued, undervalued, greatly undervalued

Pershing Square USA, Ltd. (PSUS) Brief Analysis and Updates

I just published a brief analysis for Pershing Square USA, Ltd. (NYSE: PSUS). This is an evergreen page. Most descriptions and updates of the company will stay on that page.

My Takeaway from Berkshire Hathaway Annual Meeting 2026

Every time when I decided to go to the Berkshire Hathaway annual shareholders meeting, I told myself it would be the last year because I don't like trips that much in general. For this, I would have to pay top dollars for the plane tickets and hotel rooms, and would not have enough sleep given I would spend a lot of unstructured time at night with friends for sharing and catching up, and would need to catch events in the mornings, including lining up for the Berkshire Hathaway annual shareholders meeting .

But after attending the event, after meeting a lot of great people, interesting people, hearing some insightful talks, seeing how successful and rich people being super humble to wait in line for free lunches, being able to become a full time value investor attending conferences for a few days (my day job is being a software engineer), I would always think that I will come one more time next year.

I found it helpful to have some questions in mind before going to Omaha. While most conferences and talks are about Berkshire Hathaway, for example, this year it's all about whether Berkshire Hathaway will still be fine after Warren Buffett is no longer the CEO, how well the culture will be maintained, how Greg Abel is performing in the shareholders meeting, what the intrinsic value of Berkshire Hathaway is, the expected return of the stock, etc., there are always panels with experts talking about some bigger pictures, like the macro environment, different industries and different companies. For this year, I want to know how people think about private credits and how AI will change our world. And I was glad that I got some insights from different industry experts during my trip:

Private Credits

• A lot of investment "experts" do not actually have much insights about private credits. They mostly just dismiss it by repeating some news from the headlines, i.e. private credits are not transparent, they are risky (as a whole), etc. They pretty much see them as banks during 2009-2010 (i.e. after the great financial crisis).

• An expert on private credits said he was fine with the public BDCs because they have a fixed pool of capital to invest without any urgency to reinvest capital with poor underwriting standards. He felt less comfortable for private BDCs which need to constantly raise capital and find new opportunities to invest the capital as soon as possible. So he was not very fond of the private BDCs side of Blue Owl. 

• An expert who is responsible for an endowment fund with about 5% private credits said that he was not a friend of private credits about 6 months ago when interest rate was on the way down. He said now facts changed and he likes them very much for the reason of the interest rate being held up. He didn't request any redemptions for the private credits the fund owned. He didn't give any colors on the credits concerning the private credits, so I would take that as a positive.

AI and Leadership

• Greg Abel did not expect AI to change their business models that much. That being said, they will develop more software in house for Geico, and maybe in other businesses.

• Most experts believe Greg Abel has a much stronger grasp on the businesses controlled by Berkshire Hathaway, and will increase their performance much more than when Warren Buffett was the CEO. It's not clear whether Greg would do better in terms of stock picking.

• Some experts believe Greg Abel is underrated. They believe Berkshire Hathaway subsidiaries will perform better under Greg.

• Most experts do not see AI as a big threat to the US economy.

• Some experts think AI is overhyped in terms of its capability to replace human jobs. None of them identified any big companies that would be deemed obsolete by AI.
  
  

I just want to add that I believe the investing experts who spoke on stage were wrong about AI. AI will change the landscape of jobs and the competitive advantages of companies by a lot. Berkshire Hathaway subsidiaries, while already under-invested given Warren Buffett focus on return on investment too much, would be further behind their peers. Greg Abel is definitely better than Warren Buffett in fighting the trend, but their conservative capital allocation culture would hammer their ability to innovate their businesses with AI.

The whole Omaha event is very interesting because the business knowledge of investing is so vast that you can always learn from others, and you can also provide values to others. It is very unlike some technical conferences that unless you are already an expert in the field, most participants know more than you on everything relevant to the conferences. To get the most from the event, be humble, be open, and don't be afraid to share. It's okay to agree to disagree. Try to absorb more opinions from others without judging. Simply get your ideas across and hold the urge to change other people's mind.

I feel that I can get different things every time I come to Omaha. I know a little bit more about myself, my weaknesses, things that I have to work on, and the knowledge gap that I have to fill. I become a little bit better as an investor every time. I am looking forward to the meeting next year, and I hope Warren Buffett will come as well.