My Biggest Mistakes Of 2025

12:10pm by Mark Simpson

5 comments 243 reads

As we approach the end of the calendar year, it is a natural time to take stock; to reflect on things that have gone well and events we wish had turned out differently. For many investors, this introspection will take the form of a portfolio review. When it comes to these, I find myself in a strange conundrum. I enjoy reading other investors' reviews. I often learn a lot from seeing the investment process of others or commentary on individual stocks. However, when it comes to my own portfolio, I always baulk at the idea of writing an annual review.

The problem with portfolio reviews

There are a few reasons why I pull away from doing a full portfolio review. The first is that public disclosure tends to act as a form of commitment bias. If I publicly say these are my best ideas, then it makes it a lot harder to sell them if things go wrong. Of course, Stockopedia writers always disclose when we write about something we hold, but for me, that could vary anywhere between a small short-term special situation and a significant long-term position. The second is that by focusing on short-term results, I may become excessively pessimistic in the bad years and suffer from hubris in the good years. My own performance in 2025 has been nothing to write home about; I’m slightly lagging the FTSE All-Share, which is what I typically benchmark myself against. However, I consider that not too bad a result given my small cap and value focus (see my article earlier this week to learn how UK small caps have fared in 2025). It does feel like I’ve gone 12 punishing rounds with Mr Market in 2025, and come away with a draw at best!

We all tend to “only sing when we are winning”, and annual portfolio reviews can certainly be subject to selection bias, both in the events that investors choose to write about and whether they write one at all. The average portfolio review is certainly not representative of the performance of the average investor in any given period. Investors should keep this in mind when reading reviews during this period.

Hubris is a particularly bad thing for investors; it leads us to take on too much risk after a period of good results, often leading to investors giving back much of their short-term gains. Anyone…

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ridavies

43 mins ago

No information from the company, and none expected before the new year. But my time is up with Warpaint Warpaint London (LON:W7L) -so this si MY commentary, ie it may differ from others.

I have just sold my final tranche of W7L for £2.

My much larger tranche of W7L I sold for £5.09 in January.

Subsequently, I wrongly bought back some in the meantime at much lower prices than my January sale price with the hope of picking up some trading profit as the brand recovered. I was mistaken.

Why did I hold on for so long to my latest holding is a good question.

The answer is complex because I believed in part that some of the issues at the Interims in Sept were a one off. However, the inexorable fall in SP continuing since then together with a detailed review of the market possibilities in key markets (US potential), UK (£W7L’s significant market from the first), and EU (often forgotten that it is the £W7L’s largest in terms of total sales) have changed my mind. When we get more RNS information from the trading updates in the New Year, I believe that we may find that Warpaint London (LON:W7L) is overpriced at £2, and predictions for H2 may fall significantly short of that.

Evidence? As far as that open to us as private investors, there really is only Amazon.co.uk which as we know from the past is a large and profitable element for £W7L. I follow that closely, and the evidence shows that there is significant discounting going on across the board, especially for the W7 brand, right now in this key period leading up to Xmas.. There are widespread offers of 32% and 26% available across the range. Surprisingly, there is less on the second and lesser brand, Technic but this is less important. Also usefully on Amazon, there are extra figures for the numbers of a line sold in the last month etc for many lines. These have been less than I would have expected for some Warpaint London (LON:W7L) lines, especially in gifting, very important at this time of year for presents.

Clearly, the Trump tariff situation has been unkind to Warpaint London (LON:W7L) which was pinning much hope on the expansion possibilities in the much bigger market of the US, at least 10 x the size of the UK. After expanding their personnel investment in the US, that has now been cut back and in the second half, there is only one store group taking more lines. Gone are the expansion dreams of moving up out of the deep discounters and getting the aspirational back-wall permanent fixture in the likes of Walmart. Sad but true.

You will note that I have not included any impact of the recent acquisition made by £W7L. If you look on amazon.co,uk the company has made a brave push to get the products into the limelight. There is no indication of sales effect, and therefore financial effect for the company. Anything I say would be a stab in the dark, so I am taking a neutral stance there with some positive effect on revenue in due course.

Probably, the most important consideration in my deeper analysis has been the revelations I have found in examining the US company e.l.f. (standing for eyes, lips and mouth, for those who didn’t already know.) If you want to see what e.l.f. sales on Amazon in the US have been recently, go to amazon.com and you will be surprised. On the other hand, this is a company and a brand which has recently paid $1 BILLION (my capitals!) for Hailey Bieber’s skincare brand, rhode. In other words, this is a huge company ………and, in my view, it is eating W7L’s dinner, and that of probably quite a few other UK brands too.No mention of soft consumer sales from e.l.f, and they are already poised for growth in key European markets, including the |UK, regardless.

Why its impact on Warpaint London (LON:W7L) could be disproportionate is that its pricing is closer to £W7l’s …..and it wants more. In 2024, it claims it was growing at 10 x the growth in the UK market. And it has already been in Superdrug since 2017 and Boots from 2019. I mention these in particular because £W7l mention these are significant support elements in its expectations for H2 this year; expansion in Superdrug, and some limited gifting opportunity in some Boots stores.

As for the EU, again key support elements for £W7l in H2, this was the position of e.l.s. in key store groups there.

In e l.f.’s plans for 2025, there are major moves in Germany, Belgium and the Nordics. Germany is considered the largest cosmetics market in Europe, and e.l.f have launched its products in 1,600 ROSSMANN locations nationwide, marking its largest international retail launch to date. Notably, no action from W7L in this apparently very large market.

In the Netherlands, as well as Etos, which is claimed as one of the new ‘wins’ for W7L in H2. the e.l.s. brand further expanded into Kruidvat and Trekpleister stores in May 2025.

In the Nordic region, e.l.f. partnered with SÆTHER as the exclusive distributor for the Nordic region, with launches anticipated in retailers such as H&M, Matas, Kicks, Vita, Sokos and Lyko. No mention of W7L there.

If you get the impression of a huge e.l.f. bulldozer working through western Europe, including the UK, you may.share my opinion too.

Of course, there will always be space for smaller companies, managing their resources well as W7L have done in the past. However, the profitable growth path which many of us have enjoyed with W7L over the last few years may no longer be there and the effect on the bottom line and ultimately the SP may be very significant going forward. Additionally, smaller companies may well also be operating with smaller discounters….like one of the UK companies which took Warpaint London (LON:W7L) by surprise going into administration in W7L’s Q1. This had been a long time trader with W7L for decades, and has left W7L with somewhe3re near a£1m loss in total when the total effect is eventually totted up totted up.

It is a sad situation, because it feels like I am losing am old friend - and I may be wrong. of course.

If you have got this far, congratulations and I hope this research in depth will help you make up your own minds too.

chris2021

12:23pm

Excellent and honest review. Yet to undertake my annual year-end review (why year-end and not say 23 Feb or some other random date?) and yet I know already that some of the findings will include:

Never love a share (to paraphrase Joan Collins, never love anything that can't love you),

Being too optimistic on the likely outcomes of decisions (selling too early cos its made its expected return, only to see it keep climbing; holding on because my decision was right and the entire Market doesn't see what I see),

Being too exposed to the UK and, by definition, underexposed elsewhere,

Suffering from FOMO.

JohnDoe2378

12:28pm

Honestly, my biggest mistake was stockpicking rather than invest in a US based index fund. Simples.

Rusty2

36 mins ago

Mark, Oh well at least you did not have IG Design (LON:IGR), which l think one of your Christmas share picks. On that subject, only 2 out of the 12 are in profit. IG Design (LON:IGR) is the worst down 69%. Serabi Gold (LON:SRB) is the top performer up 129%.

Cayman69

18 mins ago

Impatience and over trading were my biggest enemies and I they'll still be tough to overcome in 2026.

My biggest mistakes of 2025

The problem with portfolio reviews

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Mark Simpson

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