Giverny Capital

#### I. Institutional Overview The Q4 2025 13F filing for **Francois Rochon and Giverny Capital** reveals a portfolio that is a masterclass in disciplined, quality-oriented value investing. With a reported portfolio value of approximately **$2.998 billion** and a stable roster of **50 holdings**, Rochon continues to demonstrate the "owner’s mindset" that has defined his career. Rochon, a disciple of the school of Benjamin Graham, Warren Buffett, and Charlie Munger, manages Giverny Capital with a focus on "outstanding companies" managed by "outstanding people." This quarter’s data provides a window into how a high-conviction manager navigates a market characterized by high valuations in technology and shifting dynamics in the financial and consumer sectors. **Scale and Stability Analysis** The portfolio value, hovering just under the $3 billion mark, suggests a mature institutional scale that allows for significant positions in mid-to-large cap equities without sacrificing liquidity. Over the recent quarters, Rochon’s AUM has shown resilience, reflecting both the organic growth of his underlying "compounders" and a steady hand in capital allocation. The decision to maintain exactly 50 stocks is highly symbolic. In the world of institutional management, 50 stocks represents a "sweet spot" of concentration. It is concentrated enough that the top 10 holdings (representing over 50% of the portfolio) drive the lion's share of returns, yet diversified enough to mitigate the idiosyncratic risk of any single business failure. This is not a "closet index" fund; it is a curated collection of businesses where the manager likely knows the intrinsic value of each holding to a high degree of certainty. **The Psychological Portrait of a "Quality-Value" Investor** Francois Rochon’s investment psychology is rooted in the "Giverny" philosophy—named after Claude Monet’s garden—implying that a portfolio should be a beautiful, well-tended collection of long-term assets. The data from Q4 2025 suggests a psychological state of **strategic refinement**. We see an investor who is not afraid to prune long-term winners that may have reached valuation ceilings (such as the massive reduction in Taiwan Semiconductor) while doubling down on "beaten-down" quality names or "compounders in hiding" (such as the significant additions to Disney and Brown & Brown). Rochon’s psychological portrait is one of **extreme patience**. Many of his holdings, such as CarMax (until this quarter), Visa, and Markel, have been in the portfolio for over a decade. This "low turnover" approach is a hallmark of the "smart money" that understands the power of deferred capital gains taxes and the compounding of internal corporate returns. However, the Q4 activity shows that even the most patient investor must act when the "facts change" or when the "price-to-value" gap closes. The exit from CarMax after more than 10 years signals a profound shift in his judgment regarding that specific business model or its industry headwinds. **Scale Trends and Market Positioning** The current scale of Giverny Capital allows Rochon to be a meaningful shareholder in mid-cap companies like Medpace (MEDP) or Installed Building Products (IBP) while still holding significant weight in "mega-caps" like Berkshire Hathaway and Meta Platforms. This flexibility is a competitive advantage. In Q4 2025, the institution appears to be in a "rebalancing" phase—harvesting gains from the semiconductor and fintech sectors to fund expansions in insurance, diversified financials, and specialized industrials. This suggests a macro-neutral but micro-active stance, where the focus is on individual business resilience rather than betting on broad market directions. > **Summary Portrait**: Francois Rochon remains a "Conviction Compounder." His Q4 2025 moves indicate a transition from "growth-at-any-price" (as seen in his tech reductions) toward "resilient quality at a reasonable price," emphasizing businesses with high barriers to entry and strong pricing power. --- #### II. Sector Allocation Analysis The sector allocation of Giverny Capital in Q4 2025 provides a clear roadmap of Rochon’s macro-economic outlook and his preference for specific business models. The portfolio is heavily skewed toward sectors that benefit from long-term economic activity, payment processing, and risk management. | Sector | Weight (%) | Trend | | :--- | :--- | :--- | | **Financials** | 34.42 | Stable/Increasing | | **Communication Services** | 19.46 | Increasing | | **Consumer Discretionary** | 18.77 | Stable | | **Industrials** | 13.74 | Stable | | **Healthcare** | 6.86 | Stable | | **Technology** | 6.73 | Decreasing | **Concentration and Macro Signals** The most striking feature of the allocation is the **34.42% weight in Financials**. When combined with Communication Services and Consumer Discretionary, these three sectors account for nearly **73% of the total portfolio**. This high level of concentration indicates a manager who is not interested in broad market representation but rather in "clusters of excellence." The dominance of Financials is not a bet on traditional banking (though Bank OZK and JPMorgan are present) but rather a bet on **"Capital Allocators and Toll-Keepers."** This includes Berkshire Hathaway (the ultimate capital allocator), Visa and Mastercard (the global payment toll-keepers), and insurance powerhouses like Progressive, Kinsale, and Markel. This allocation suggests a belief that in an environment of fluctuating interest rates and economic uncertainty, the most reliable returns come from companies that manage risk or facilitate commerce without taking on significant balance sheet risk themselves. **The Great Tech Retreat** Perhaps the most significant macro signal in this report is the **Technology sector weight of only 6.73%**. For a modern institutional portfolio, being so underweight in Technology (relative to the S&P 500's ~30% weight) is a bold contrarian stance. The massive **96.5% reduction in TSM (Taiwan Semiconductor)** is the primary driver here. This suggests that Rochon views the current "AI-driven" tech valuation expansion with skepticism, or at the very least, he believes the risk-reward profile of the hardware providers has become unattractive compared to other sectors. By shifting away from "Hard Tech" (Semiconductors) while maintaining "Soft Tech" or "Platform" companies (Meta, Alphabet), he is signaling a preference for companies with direct consumer relationships and proprietary data over those in the capital-intensive manufacturing cycle. **Sector Rotation: From Hardware to Experiences and Insurance** The increase in **Communication Services (19.46%)** is driven by the continued dominance of Meta and Alphabet, but also by the aggressive addition to **Disney (DIS)**. This represents a rotation into "content and experience" assets. Rochon seems to be betting that the "streaming wars" are reaching a rational conclusion and that Disney’s unique ecosystem (Parks, IP, and Media) is undervalued. Simultaneously, the growth in the **Financials** sub-sector of **Insurance** (via Brown & Brown and Kinsale) indicates a defensive posture. Insurance brokers and specialty insurers often thrive in "hard markets" where premiums are rising. This move provides a hedge against inflation and economic volatility, as insurance is a non-discretionary purchase for most businesses and individuals. **Industrials: The "Niche Compounder" Strategy** The **13.74% weight in Industrials** is anchored by AMETEK and HEICO. These are not "heavy" industrials sensitive to the commodity cycle; they are "niche" players with high margins and "razor-and-blade" business models (especially HEICO in the aerospace aftermarket). This allocation reflects a preference for "quality industrials" that can grow through small, bolt-on acquisitions and maintain pricing power through specialized engineering. **Macroeconomic Inference** Based on this allocation, we can infer that Francois Rochon is positioning for a **"Normalization" economy**. He is moving away from the "hyper-growth" narratives of the semiconductor industry and toward the "steady-state" compounding of financial services, insurance, and dominant consumer platforms. He is prepared for a world where capital has a cost (favoring high-cash-flow financials) and where brand and IP (Disney, Meta, Alphabet) are the ultimate competitive moats. --- #### III. Top 10 Holdings Deep Dive The Top 10 holdings of Giverny Capital represent the "ballast" of the portfolio, accounting for a significant ---