Investing involves risk, and there is no guaranteed return on your capital. I focus on businesses with strong economics, predictable futures, and attractive prices—but various risks always exist, and the market may take time to accurately price even sound investments.

While I believe the true measure of a portfolio's value lies in the value of its underlying businesses, we have to rely on market prices as a practical benchmark—not least because my fees are based on them. In the long run, market price and intrinsic value usually align, but there are periods where they diverge. I think a minimum of three years is essential for evaluating performance meaningfully; five years is better.

In a highly speculative bull market, prices can become detached from reality—and often keep rising. People overpay, hoping to sell to someone who will overpay even more. Eventually, prices come back down. When they do, owning good businesses at sensible prices matters. But I won't pretend it's easy to watch from the sidelines while speculation is being rewarded.

If a particular investment does exceptionally well, it may grow to constitute a significant portion of your portfolio. I don't believe in trimming a highly successful position just to maintain an arbitrary asset allocation. This can lead to concentrated portfolios. If that bothers you, it may be wise to diversify elsewhere—and as I've mentioned, you can hold index funds or ETFs in the same account without paying my management fee on those assets.

I don't know what the stock market will do, what trendy speculative assets will do, or what the hottest company in an unpredictable industry will do. That's why I only invest in proven industries and in companies I can understand.

I invest your money with the same care and diligence I apply to my family's investments. While there will be differences in our portfolios due to timing and available funds, I will never invest your money in any company I wouldn't own personally.