The drawdown diaries: 2020, revisited

Four years on, it is worth going back to the spring of 2020 honestly, while the memory is still uncomfortable enough to be useful.

In the worst weeks our holdings fell hard. Durable businesses are not spared when the selling is indiscriminate. We did three things. We added a little to what we already owned, where the price had fallen further than the prospects. We sold nothing in a panic. And we wrote to you, plainly, more often than usual.

What actually mattered

The portfolio recovered, as good businesses tend to. The lesson was not really about the businesses, though. It was about the partners. Ninety-six percent of partner capital stayed put through the drawdown. That number is the reason we can invest the way we do. Permanent capital is not a slogan. It is the thing that lets us buy when other people are forced to sell.

We do not know when the next one arrives. We know it will, that it will feel worse and different, and that the response will be the same. Own durable things. Keep some cash. Tell the truth. Trust the partners who chose us for exactly this.

The views above are the firm's own and are provided for information only. They are not investment advice, nor an offer or solicitation to invest. Capital at risk; the value of investments can go down as well as up, and past performance is not a guide to future results.