Silver Lining | Sycamore Portfolio Update [August 2025]
Performance update, thoughts from a tough month, portfolio changes, what I like about PoolCorp, baseline thesis on a new idea, and much more
“With my business, the way you make big money is you find a great management team and a good concept, and you stick to it, and you add to it over time.”
Stanley Druckenmiller, Duquesne Family Office
Click here to view the full disclaimer for Sycamore Capital Management, LLC.
Monthly Returns
Sycamore // -12.93%
S&P 500 // +1.40%
Differential // -14.33%
Year-to-Date Returns
Sycamore // +11.51%
S&P 500 // +9.84%
Differential // +1.67%
Sycamore Historical Performance
Annual:
Total Return (Simple Sum) of Monthly Performance Since Launching Monthly Sycamore Portfolio Updates:
First Thoughts
The Trade Desk Implodes
It was, without a doubt, an extremely challenging month. Two-thirds of the portfolio posted gains above the S&P 500 in August, but The Trade Desk collapsed 35% during the month.
I wrote about the earnings report that sent the stock down in depth and overall had to re-underwrite my thesis on the stock. Here it is in case you missed it.
Despite the drawdown, it is in times like this that the Sycamore strategy has the opportunity to shine. As I often say, the purpose of Sycamore is to build conviction through in-depth qualitative research and underwrite (and re-underwrite) a few highly concentrated bets each year. When drawdowns like this occur, if you can re-underwrite with conviction, stomach the volatility, and remain patient, the strategy can lead to multiple years of compounded outperformance.
The silver lining of the past month is that despite the worst single month I have ever posted, Sycamore is still outperforming the S&P 500 YTD.
Uber Hits All-Time Highs
This outperformance compared to the index has been driven by Uber’s big outperformance this year, +55% YTD at month-end. I wrote about their Q2 earnings report in depth in early August, and if you missed it, you can find it here:
The top-line growth and cash flow generation of this business is incredible right now and I am very pleased with it as a shareholder. I must say though, as an avid user, I have definitely noticed subtle and not-so-subtle price increases inside the Uber Eats app that have discouraged me from using it. Not only this, and hopefully this was a one-off, but the customer service through the Eats app is horrendous. Like, it’s really bad. It makes you yell at your phone.
The stock still trades at a reasonable 19x FCF for a business growing the way it is. And is trading at about a 10% discount to its 3-year average.
More detail below on what I am doing with Uber as the stock made new all-time highs in late August.
Portfolio-as-a-Company
Portfolio wide, I have begun looking more into evaluating the portfolio as a whole. And to do this have been using Fiscal.ai portfolio tools to assess.
The portfolio as a whole is essentially a $109B “company” that I call Sycamore. It’s compounding revenue at 30%, runs at 21% net margins, and generates a 24% ROIC. Sycamore is converting 23% of revenue into free cash flow and trades at a 23x FCF multiple. I can live with that.
Lastly, I did add a new position in August that I believe provides the portfolio added downside stability without compromising potential upside. See below for my thesis on the new position.