The larger they get, the more important the law of large numbers will become, as they are limited by the size of their markets.

At one times book, we basically bought Svenska at its liquidation value and paid nothing for the company’s future ability to grow, its superior return on capital, its unique culture, etc.

Every day we are getting closer to a ‘Liz Truss moment.’ She announced a highly inflationary ‘pro-growth’ budget. The UK bond market responded with a ‘mini-crash,’ while the stock market experienced a much bigger decline.

Svenska’s lending practices are very conservative — loan-to-value for Svenska-generated mortgages is 55%. House prices would have to drop 45% before Svenska would start losing money on mortgages.

Having a long-term time horizon is a valuable asset that has to be guarded like a treasure. Having a longer time horizon than the rest of the market is a significant competitive advantage.

P/E compression and earnings growth work against each other, resulting in zero (or nearly) price appreciation plus dividends, though this is achieved with plenty of cyclical volatility along the way.