Subject: Benchmark Investing Update Dec 26, 2025
Benchmark Investing Update Dec 26, 2025
This update is to Kenneth Lee’s Benchmark Investing picks based on the latest Monday’s data release. The S&P500 took another leg up in the fourth quarter of the year, finishing up about +2%, and finishing the year up nearly 18% (total return). With this update there are 3 companies in the DJIA 30 that are below their downside price targets. They are MRK -9%, CRM -50%, and AMZN -32%. Among this select group only CRM would qualify as a BI pick at this time.
If you are interested in following along with this methodology against a broader range of stocks outside of the Dow30, these picks are posted here under this post on a regular basis as trades occur (BUY, SELL, and ADD).
Market Valuation (Dow 30):
Market Valuation (Dow 30):
The DOW30 market is getting closer to fair value but remains a bit OVERpriced according to the BI method of valuation by about 23%. With the final quarter of the year registering more gain the market remains at significantly overpriced levels.
Downside: -40%
Upside: -7%
Long Buy Rules:
I am using the following TTD rules for Long position considerations:
1. Year-over-Year EPS growth must > 10%, which are the next 4Q / current quarter + previous 3 quarters earnings results
2. VL 3-5 Year price appreciation > average price appreciation of the market
3. When calculating ROE and BV figures, ignore years when they are negative, but must have at least 7+ years of data to be included in final consideration
4. Avoid erratic ROE ratios, that is where they are > 2std deviations = Curr ROE > (10 Year Avg + 2 * Std Dev)
5. ROE and BV current figures must be updated by VL
Sell Rules:
I am using the following TTD rules to Sell Long positions:
Criteria (1 OR 2 OR 5, AND 3 AND 4):
1. Price Appreciation < Market Average Appreciation
2. Current Price > BI HiPrice
3. Hold time > 365 days per cycle
4. ROE & BV must be current
5. No longer listed as a market average component
Summary of Results:
VL Current ROE/BV Down Up %<10Y %<10Y EPS Div 3-5Y 3-5Y VL3-5Y VL18mo ROE
Ticker Date Price Updated Price Price Down Down4Qs Delta Yield VL L$ VL H$ % Chg % Chg <2STD Name
CAT 7-Nov-25 583 TRUE 231 355 153% 120% 6% 1.0 450 610 -9% -11% FALSE Caterpillar Inc.
MCD 14-Nov-25 311 FALSE 11% 2.4 410 500 45% 8% TRUE McDonald's Corp.
CVX 21-Nov-25 150 TRUE 84 120 79% 43% 4% 4.7 205 250 51% -6% FALSE Chevron Corp.
JPM 21-Nov-25 328 TRUE 182 272 80% 75% 7% 1.9 290 355 -2% 8% FALSE JPMorgan Chase
BA 28-Nov-25 216 FALSE 113% - 295 440 68% 10% TRUE Boeing
TRV 28-Nov-25 292 TRUE 252 333 16% 34% 8% 1.5 365 445 37% 15% TRUE Travelers Cos.
UNH 28-Nov-25 332 TRUE 263 375 26% -6% -20% 2.7 365 550 39% 22% TRUE UnitedHealth Group
AMGN 28-Nov-25 333 FALSE -6% 3.0 330 445 16% 11% TRUE Amgen
VZ 5-Dec-25 40.48 TRUE 34 44 19% 19% 1% 6.8 60 70 61% 9% FALSE Verizon Communic.
CSCO 5-Dec-25 78.16 FALSE 43 61 80% 78% 7% 2.1 85 105 21% -10% FALSE Cisco Systems
HD 12-Dec-25 350 FALSE -2% 2.7 385 470 23% 23% TRUE Home Depot
SHW 12-Dec-25 325 TRUE 217 344 50% 46% 11% 1.0 425 575 53% 19% FALSE Sherwin-Williams
PG 12-Dec-25 145 FALSE 136 179 6% 7% 3% 2.9 180 220 38% 14% FALSE Procter & Gamble
NVDA 19-Dec-25 191 TRUE 118 369 61% 46% 65% 0.0 230 345 52% 28% FALSE NVIDIA Corp.
AAPL 19-Dec-25 273 FALSE 120 197 128% 129% 10% 0.4 305 410 30% 16% FALSE Apple Inc.
JNJ 26-Dec-25 208 TRUE 162 203 28% 28% 10% 2.5 205 250 9% -8% FALSE Johnson & Johnson
MRK 26-Dec-25 107 TRUE 117 160 -9% -8% 7% 3.0 130 175 43% 30% FALSE Merck & Co.
HON 2-Jan-26 197 TRUE 181 247 9% 10% 0% 2.4 250 305 40% 22% TRUE Honeywell Int'l
MMM 2-Jan-26 162 TRUE 113 163 44% 29% 13% 1.8 135 200 4% -10% FALSE 3M Company
GS 2-Jan-26 907 TRUE 389 600 133% 142% 6% 1.8 765 1035 -1% 13% FALSE Goldman Sachs
KO 10-Oct-25 69.87 TRUE 60 75 17% 17% 3% 2.9 75 90 17% 7% FALSE Coca-Cola
WMT 17-Oct-25 112 TRUE 47 67 140% 137% 13% 0.8 125 155 25% 16% FALSE Walmart Inc.
NKE 17-Oct-25 60.93 FALSE 54 86 12% 13% 25% 2.7 75 110 87% -15% TRUE NIKE Inc. 'B'
DIS 24-Oct-25 114 TRUE 118 176 -4% 17% 2% 0.9 135 205 48% 13% FALSE Disney (Walt)
AXP 31-Oct-25 381 TRUE 196 301 94% 99% 11% 0.9 290 440 -4% 19% FALSE Amer. Express
V 31-Oct-25 355 TRUE 302 412 18% 19% 16% 0.7 390 475 21% 0% FALSE Visa Inc.
IBM 31-Oct-25 305 TRUE 111 159 175% 175% 7% 2.4 255 310 -7% 9% FALSE Int'l Business Mach.
MSFT 31-Oct-25 488 FALSE 328 502 49% 51% 15% 0.8 675 825 53% 26% FALSE Microsoft Corp.
CRM 31-Oct-25 266 TRUE 536 938 -50% -46% 11% 0.6 385 575 80% 0% FALSE Salesforce Inc.
AMZN 31-Oct-25 233 TRUE 341 584 -32% -28% 3% - 325 440 64% 26% FALSE Amazon.com
Dow30 48,711 29,101 45,026 2.1 52,832 69,952 Dow Jones Industrial Average
Appreciation Potential -40% -7% 9% 44% 33% 10%
AllTooFoolish's CAPS Portfolio:
If you are interested in seeing this method applied to a broader universe of stocks, follow my actively managed Benchmark Investing portfolio using an update to this post. I have been using this methodology for many years with great success. In this post you will find my current dynamic managed portfolio and can see my most recent activities as they occur.
Notable activity in my Managed BI portfolio over the past several months:
• KDP, ADD on Oct 6, 2025, meets all BI criteria. Current downside price target -45%.
• TAP, ADD on Oct 6, 2025, meets all BI criteria. Current downside price target -43%.
• IVZ, SELL on Oct 13, 2025, overpriced, downside price target +75%. My total return was about 93% including dividends. Over the same period of time, the market returned approximately 60%.
• WBD, SELL on Oct 20, 2025, overpriced. The overpricing is likely a result of the recent takeover activity related to this stock. I originally took this trade about 9 years ago. Over this time, the market has gone up 190% and WBD's total return has been 127%.
• CRM, ADD on Oct 27, 2025. All BI criteria met. The stock's price is -52% below its downside price target.
• MOS, BUY on Dec22, 2025. All BI criteria met. The stock's price is -31% below its downside price target.
• PFE, ADD on Dec22, 2025. All BI criteria met. The stock's price is -32% below its downside price target.
I will continue to track and update two different Portfolios in 2026. Both these portfolios will be held for the entire year.
The first portfolio (Managed) will be a continuation of last year picks that have not yet hit a Sell signal plus any new picks that qualify using the latest results. These are noted as “ADD” or “BUY” during each quarterly update.
2025 has now concluded and here are the FINAL results.
2025 BI Managed Portfolio
ALGN, CAH, EOG, KMI, BK, INCY, TMUS, LKQ, CHRT, BALL, L, KIM, CRM, TAP, IVZ, NFLX, WBD, SLB, PYPL, PTC, EPAM, AMZN, META, NVDA, PFE, PAYC, AKAM.
BI Managed Portfolio Total Return Year-to-Date +10.8%
S&P 500 Total Return Year-to-Date +17.7%
The largest winner was ALB +168%
The biggest loser was CHTR -40%
The second portfolio (Current) will only include picks that qualified based on the Buy rules using the results at the very beginning of the current year and will be held for the entire year without change.
2025 Current Portfolio
ALGN, PAYC, ADM, TAP, HAL, SLB, PYPL
BI Current Portfolio Total Return Year-to-Date -9.5%
S&P 500 Total Return Year-to-Date +17.7%
The largest winner was ADM +18%
The biggest loser was PYPL -32%
And here are the picks for 2026.
2026 BI Managed Portfolio
ALGN, TECH, CAH, CMG, EOG, TMUS, LKQ, CHTR, BALL, NVDA, MOS, MRK, PFE, PAYC, AKAM, KDP, TAP, SLB, ALB, L, PYPL, CRM, EPAM, AMZN
BI Managed Portfolio Total Return Year-to-Date +0.0%
S&P 500 Total Return Year-to-Date +0.0%
The largest winner to date is N/A +0%.
The biggest loser this year is N/A +0%
The second portfolio (Current) will only include picks that qualified based on the Buy rules using the results at the very beginning of the current year and will be held for the entire year without change.
2026 Current Portfolio
PCAR, ALGN, COO, CHTR, BALL, MOS, PFE, KDP, TAP TTD, SLB, CRM
BI Current Portfolio Total Return Year-to-Date +0.0%
S&P 500 Total Return Year-to-Date +0.0%
The largest winner to date is +0%
The biggest loser this year is +0%
Disclosures and Useful Terms
VL Date is the date of the last summary report update from Valueline as indicated in the post’s subject line. All data sources from the Valueline Dow30 reports are made publicly available on their website. https://research.valueline.com...
Current Price is the closing price of the stock as reported by VL, which is usually a few days behind the date
of the time period mentioned in this posting’s subject line.
• ROE/BV Updated is an indication if the stock’s BV and ROE have been updated through the end of the Benchmark evaluation time frame.
• 10Yr Down is the 10 year downside price. The company must have at least 7 years of non-negative ROE data to qualify.
• 10Yr Down4Qs is the 10 year downside price averaged over the previous 4 quarter’s valuation price.
• 10Yr Up is the 10 year upside price. The company must have at least 7 years of non-negative ROE data to qualify.
Both upside and downside are calculated using the method outlined in TTD book. Also, a discussion of calculating the upside and downside can be found here:
http://boards.fool.com/Message......
• %<10Y Downside is the current price divided by the 10 Yr downside expressed as a percentage.
• EPS Future Delta is the projected growth in EPS for the next 4 quarters versus the last four reported quarters.
• I use the latest EPS data from the VL spreadsheet which are updated as soon as new earnings are reported.
• Div Yield is the current % dividend payout ratio per share.
• 3-5 Y Low/Hi Price Est. is the downside/upside price estimate which is calculated using the projections of Book Value and ROE as discussed in TTD.
• Min VL Price Appreciation is the expected change in price from current price to low end VL projected 3-5 year appreciation price.
• VL Price 18 Price Appreciate is the VL projected % change in price from the current price within the next 18 months.
• ROE >2STD is part of a margin of safety consideration, which is briefly discussed in TTD on pg 70-71.
I compare the current year's ROE versus the last 10 years of ROE data. If the current ROE is greater than average (10 Yr ROE) + (2 * stdev(10 Yr ROE)), then this column is TRUE, else it is FALSE. This tells me that the stock's ROE is much higher than its historic average and should therefore be avoided.
-AllTooFoolish