Growth demagogues will argue that valuation is irrelevant for high-growth companies because the price you pay for growth doesn’t matter.

Humility means you don’t have all the answers, you keep an open mind, and you realize that the range of outcomes is wider than in the past.

I figure it is only fair we have a name for human-operated vehicles.

The goal is to reduce the idiosyncratic risk that comes from today’s transforming global political environment and fast technological change.

Over the last fifteen years, index investing has turned into a religion that promises never-ending returns from stocks, no matter how expensive the stock market might be. ‘Buy the dip’ and ‘never sell’ have become this religion’s commandments.

Investors should ignore the debt-to-asset ratio and pay closer attention to interest coverage ratio or debt payoff ratios, which tell a more accurate story about a company’s capital structure.

In the long run a stock price will reflect a company’s (true) intrinsic value. In the short run the pricing is basically random.

Investing is a probabilistic adventure: You assess upside and downside probabilities of a potential investment, and if at the end the balance is significantly favorable, you pull the trigger.

We often manage most of our clients’ money. Many times, it’s all their investments. So we treat it as irreplaceable capital. When you’re 60 and nearing the end of your working years, you can’t really recover from big mistakes.

Through kaizen, those small incremental improvements, we’re constantly reaching toward tomorrow.

Quality is about the how; kindness is about the why. Kindness is how quality is transmitted between people.

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.

The worst-case scenario sets our floor. If we think the company is worth $50 in a disaster and $100 in the most probable scenario, we don’t want to pay much more than $50. This is our margin of safety.

Their assets (loans) and liabilities (customer deposits and borrowings) must be marked to market (values) quarterly, and thus book value becomes a useful metric.

I am not advocating for timing the market, but I am arguing for being rational, not letting the market make decisions for you. Don’t get intoxicated on the market’s euphoria.