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Letters & Theses

François Rochon · Giverny Capital

Annual Letter to our Partners 2025

Giverny Capital's 2025 annual letter, on a year of underperformance

Covers FY2025Published Mar 2026Investor letter · Investment

What to notice

  1. 1

    Rochon separates causes: two stock-specific mistakes, and a market that sold software companies on fear of AI while their earnings kept growing.

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Why read it

A rare full account of a bad year from a long-term manager: what went wrong in each holding, which mistakes were his, and why the method stays the same.

About this letter

François Rochon, founder of the Montreal investment firm Giverny Capital, writes an annual letter to the clients he calls partners. The letter for 2025 was published in March 2026; its cover carries a painting from the firm's collection, and the letter itself starts on page 2.

It was a poor year by Rochon's standards. His model portfolio returned 2.7% against 13.7% for its benchmark, against a record since 1993 of 14.7% a year. The letter sets out why under the heading "Explanations, Not Excuses": two holdings that fell by more than half, CarMax and Fiserv, both now sold, and a fall in Constellation Software that he attributes to fear of AI rather than to its results. Around that sit a discussion of the circular financing in AI spending, the concentration of the S&P 500 in its ten largest stocks, and the firm's yearly "Podium of Errors".

Companies

  • Constellation Software
  • CarMax
  • Fiserv
  • Visa
  • Dollarama

Themes

  • mistakes
  • investing philosophy
  • ai
  • valuation
  • long term thinking

L3VLUP does not host this document. It belongs to Giverny Capital; the notes above are L3VLUP’s reading of it.