The first quarter was largely uneventful, once we got past January’s significant declines in the stock market. Our view of the current environment is that across the globe there are many, many things which are worrisome and often frightening. We also believe that this has always been the case. Our strategy, unchanged over the years, is to own very high quality businesses (exceptional businesses, in our parlance), which are run by managers who treat us as partners and where there exists a meaningful opportunity to reinvest cash flows at potentially above-average rates of return.
Our choice of holdings may often reveal companies you are not fully familiar with, but which we believe demonstrate all the ingredients we admire. Occasionally we find that the passage of time causes us to modify our views about individual investments. However, our history has been that we have more often erred on the side of “hanging on,” rather than selling. This discipline of potentially allowing our profits to grow untaxed is, we are told, contrary to much of the professional investment managements’ practice today. We believe that it is an important differentiator. Continue Reading »