"A diversified portfolio of high-quality equities and fixed income remains the most reliable way to preserve and compound wealth over the long term. In the short term, however, it can feel uncomfortable. Not all parts of a portfolio move together, and that is precisely the point. Diversification works when a portfolio is built on reasonably priced, quality assets whose performance differs across market cycles. ..."

"You may have noticed an increasingly frequent event: large companies are breaking themselves up into smaller, more focused businesses. The stated reasons vary – management focus, sharper capital allocation or an activist investor seeking to eliminate the “conglomerate discount” – but the underlying goal is the same: to unlock value that has been hidden under an expansive corporate umbrella.  Sometimes these spin-outs create a genuine positive transformation, while other times they are little more than a cosmetic reshuffling.  For us, each transaction is both an opportunity to consider a newly independent company and a reason to revisit our thesis for holding the parent, examining carefully whether one, both or neither belong in your portfolio.  This redoubled focus helps us own the right businesses for the long term..."

"In the second quarter, the market was volatile, falling 12% percent after the Liberation Day tariffs were announced, only to claw back all of its losses and close near a record high.  We are well acquainted with uncertainty in the world economy and the markets, and our mantra has always been the one printed on the cover of the Hitchhiker’s Guide to the Galaxy, “Don’t Panic.”  It’s easy to maintain your composure when your portfolios are built for the inevitable bumps in the road.  Our companies have been chosen to endure times of economic choppiness, but each period of stress has its own causes that lead us to reexamine our companies and their businesses to test their resilience.  What is revealed is a new layer of mettle..."

"You have no doubt noticed the volatility in the markets over the past several months.  Happily, your investments have been far less volatile, holding their value in the face of the stock market’s weakness.  We thought that it would be helpful to discuss what is happening and what the lessons of history might teach us about the current environment..."