About
The Steady Investor is a daily letter about patient investing: what makes a business worth owning for years, what the market is asking for it this morning, and why those two questions have to be answered in that order.
There is no shortage of writing about which companies are good. There is much less about what a good company is worth, and almost none about the difference between admiring a business and buying it at a price that allows for being wrong.
That gap is where most of the damage happens. The same durable business can be a reasonable holding at one multiple and a long disappointment at another, with nothing about the company having changed in between. Price is the variable readers are encouraged to ignore, and it is the one they control.
Each weekday we take one business, or one industry, and work through it slowly. What does it earn, on what capital, and how steady has that been across a full cycle? What is the market asking today relative to that record? What growth and margin path is embedded in the current price, and is that path plausible or merely possible?
We work from filings: the annual report, the segment disclosures, the maturity schedule, the cash flow statement. Not from the summary of the filing, and not from whoever has already formed a view about it.
Publishing daily and trading daily are different things. We write every weekday because there is always something worth examining; most of the time the useful conclusion is that nothing has changed and the price is still asking too much. We print that conclusion rather than manufacturing an alternative.
Timing, as we use the word, means conditions rather than dates. What is currently assumed, how much of it is already paid for, and what remains if the assumption is wrong. We do not name the week a stock turns, and we treat anyone who does with scepticism.
We are not an investment adviser, a broker-dealer, or a financial planner. We publish general commentary written without any knowledge of your circumstances, your tax position, or your time horizon, and nothing here is a recommendation to buy or sell anything.
We also do not run a model portfolio, keep a scoreboard, or claim to know where the market goes next. Examining what a business earns and what it costs today is a tractable problem. Predicting the next six months of prices is not, and treating it as though it were is how this genre usually goes wrong.
We take advertising and we label it. Where we have been paid by, or hold a position connected to, a company discussed in an issue, that issue says so at the top. When we get something wrong we correct it in the next issue and say what changed.
The Steady Investor is published by Highgraph Marketing LLC.
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