Portfolio Update Q2 2026
Waiting for Christmas
“When I say I understand a business, I mean I have a reasonable fix on what its earnings power and competitive position will look like in five or ten years.”
— Warren Buffett
Most people lose money because they cannot sit still. That’s it.
Buffett built the greatest fortune in history mostly by waiting. In 1969 he shut down his entire partnership and handed the money back. Not because he was scared, but because nothing was worth buying. He sat in cash and looked like a fool. Then 1973 and 1974 came, the market bled out, and everything he wanted went on sale. He didn’t predict the crash. He just refused to act until the odds were his.
When he finally moves, he doesn’t flinch. He bought The Washington Post and watched it drop 50% in a matter of months. His reaction?
“That was the best thing that could’ve happened; it doesn’t get any better than that.”
Everyone else saw a loss. He saw a sale on a business he already understood. His favorite holding, See’s Candies, loses money eight months out of the year. He sleeps fine.
“We know the seasonal pattern, so we don’t worry in July that somehow Christmas won’t come. We’ve got a couple thousand years on our side.”
That’s the difference between a price and a business. A price is what the screen screams at you this morning. A business is what it becomes while everyone else is panicking.
So what is a business actually worth? Buffett’s answer is the simplest in finance. A business is a bond. It throws off coupons of cash, year after year, until doomsday. The only difference is that the coupons are not printed on the instrument. Your entire job as an investor is to estimate those coupons yourself and never pay more than they are worth today. If you cannot estimate the coupons, you cannot know the value. And if you know the value, the daily price stops being information and becomes an offer. Sometimes a stupid one, in your favor.
The only reason to put cash into anything is to take more cash out later. Not by selling it to the next guy, that is just a game of who beats who, but from what the asset itself produces. Focus on the business and you are an investor. Focus on the price and you are a speculator. That is not my game.
So I spent this quarter estimating coupons. Three businesses, plus a decision about what my cash should look like while it waits. If I am wrong about what follows, I will lose a very large amount of my own money. I am not writing about these companies. I own them. Heavily.
Here are four stories where I’m waiting for Christmas.
