Pieter Slegers — Portfolio Update: July 2026

Kinsale writes insurance for the risks ordinary insurers will not touch — the unusual building, the awkward liability — mostly for small and mid-sized businesses. It does everything itself: its own software, its own underwriters deciding what to insure, its own staff settling the claims. That matters because an insurer that outsources underwriting to brokers is partly paid on volume; one that keeps it in-house is only trying to write policies that make money.

The uncomfortable bit right now is that insurance prices are falling. Competitors have piled into the same market, so premiums are coming down — the industry calls it a soft market. Slegers makes an explicit parallel with memory chips: in both cases high profits attract competition, competition drives prices down, weaker players lose money and withdraw, and prices recover. The difference is that Kinsale is the low-cost operator, so it should be one of the survivors rather than one of the casualties. His complaint is that the share price now assumes the soft market lasts forever.

Two independent measures say the same thing. The shares trade at less than half the multiple of earnings they normally command. And a reverse discounted-cash-flow calculation — working backwards from today's price to ask what growth is being assumed — says Kinsale needs to grow its cash flow by only 3.3% a year to hand shareholders 10% annually. For a company that has grown many times faster than that, it is a low bar.

Inter Parfums makes and sells perfume, but it does not own the names on the bottles. It signs exclusive worldwide licences with fashion houses — Montblanc, Jimmy Choo, Coach — and handles everything else: creating the fragrance, manufacturing it, and getting it onto shelves in more than 120 countries and 22,000 points of sale. The brand owner gets a royalty and keeps its image; Inter Parfums gets the economics without having to build a luxury house from scratch.

That arrangement is why the business needs so little capital. It is not carrying department stores or advertising a brand into existence; it is running a supply chain and a distribution network. And the network is the defence — a fashion house choosing a fragrance partner is really choosing shelf space in a hundred countries, which almost nobody else can offer. Once chosen, the partner tends to stay.

The valuation case is unusual because the shares had already risen more than 20% since a colleague flagged them in June, and Slegers still calls them cheap: 23 times next year's earnings against a long-run average near 34, roughly 40% below where the market has historically valued the same business. As with Kinsale, the reverse DCF says 3.3% annual cash-flow growth is all that is needed for a 10% return.

This is the first appearance of Inter Parfums in this archive, and it is disclosed as something already owned rather than a new purchase — presumably one of the six holdings covered in the unarchived Part II of the April portfolio update.

Ameriprise looks after $1.2 trillion of clients' money through more than 10,000 financial advisers, and also sells retirement and protection insurance. Its advantage is human inertia: once someone has handed over their savings and explained their whole financial life to an adviser they trust, moving is a genuine ordeal. More than nine clients in ten stay each year, and the more products they hold — planning, investments, insurance — the harder leaving becomes.

The interesting argument in this update is about the share price rather than the business. Ameriprise spends much of its profit buying back its own shares — Slegers calls it a "cannibal stock," a company steadily eating its own share count so remaining owners hold a bigger slice. For a company like that, a falling share price is not bad news: the same money retires more shares. So the volatility since he bought it has been, in his words, "good news."

Notably he does not claim it is cheap on the multiple — it sits right at its own historical average. The case rests on the reverse DCF instead, which says Ameriprise needs to grow free cash flow by just 2% a year to deliver a 10% annual return. That is the lowest hurdle of the three names in this issue.

Micron makes memory chips — the storage inside phones, computers and AI servers. This year it has been one of the market's biggest winners, along with Western Digital and SanDisk, on the back of AI demand. Slegers' argument is not that the demand is fake; it is that memory is a commodity, and commodity profits are borrowed from the future.

The point turns on pricing power. A memory chip from one maker is interchangeable with another's, so no producer can set its own price; the price is whatever supply and demand dictate that month. His test for this is a good one: could you imagine Coca-Cola or Moody's losing money because customers demanded lower prices? No — but that is exactly what happened to Micron in 2023 and 2024, when its own chief executive says customers pushed prices down so hard that the industry stopped building factories.

That is why prices are so high now: AI demand has arrived on top of capacity nobody built during the bad years. Historically, extraordinary profits then attract exactly the investment that ends them. He cites Jeremy Grantham for the rule — "if you make abnormal profits, you will receive competition. If you make obscene profits, you'll get ferocious competition" — and points to 2018, when Micron's margins spiked, then fell, and the shares fell with them the following year. Today's margins are higher than in 2018.

The conclusion is deliberately modest rather than a short call: the market is pricing these profits as permanent, "maybe this time really is different. But that's not a bet that I want to make. And I don't think you should do either."

Berkshire appears here as an instrument rather than as a purchase — the closest thing to a pure index of "boring, high-quality business" that the market prices daily. When speculation runs hot, Berkshire lags; when it breaks, Berkshire tends to lead for years afterwards.

Slegers uses it as a timing gauge with a light touch. Over the past year it has trailed the S&P 500, consistent with the market ignoring quality. Over the past month it has been ahead, which he reads as a tentative sign that money is starting to rotate back. He does not build a forecast on it; it is offered as the one publicly observable signal that the pattern he expects may be beginning.

AbbVie is not owned and no view is offered on it today — it is included purely as a worked example of a share price and a business moving in opposite directions for years at a time.

Through 2018 the stock fell steadily because investors feared its most profitable drugs would lose patent protection and be undercut by copies. Throughout that same period the cash the business actually generated kept rising. Eventually the two reconnected and the shares more than doubled. The lesson Slegers draws is the one he needs for his own book right now: a multi-year gap between a falling price and improving fundamentals is an ordinary market event, not proof that the analysis was wrong.