Investment Mindset
Subject: Your Q1 2026 Investment Report Is Ready
Your personalized investment reports as of June 30, 2026, have been uploaded to your secure vault at MyWealthChart.com .
Along with your report, we have included a brief review summarizing our current investment mindset, a few notable business developments, and significant capital allocation decisions from the past twelve months. A little bit of……………..
Dis and Dat
Investment Mindset
Successful investing requires a different mindset than saving, speculating, or gambling.
While each quarter brings new headlines, our approach remains grounded in a few principles:
- There are no guarantees in investing.
- Investment decisions are based on businesses and opportunities, not popularity.
- We do not attempt to predict market movements, economic cycles, or political outcomes.
- Some investments will disappoint, which is why diversification and time matter.
- Results should be evaluated over a full market cycle, not a quarter or a year.
- Temporary underperformance is often the price paid for maintaining discipline to the investment mindset.
These principles influence every investment decision we make and help guide our actions through both favorable and unfavorable market environments.
General Investing Environment
Today's environment continues to present both opportunities and challenges.
Higher interest rates have made preservation assets more attractive than they were in recent years. At the same time, artificial intelligence continues to attract significant investor attention, while inflation remains a consideration for families and businesses alike.
Rather than attempting to predict how these developments will unfold, we remain focused on understanding their potential impact on business value, opportunity sets, and capital allocation decisions.
Capital Structure
Most client accounts continue to maintain several years of anticipated spending needs in Treasury securities and cash equivalents.
This structure is designed to reduce the likelihood that market volatility forces the sale of long-term investments at unfavorable prices.
The remaining capital continues to be allocated toward businesses we believe are capable of creating value over longer periods of time.
While no portfolio structure can eliminate risk, we believe maintaining both preservation capital and investment capital creates a more resilient foundation for long-term decision making.
Portfolio Stewardship
One observation is that most portfolio holdings have experienced little or no change in the share amounts or the underlying businesses.
While market prices, headlines, economic forecasts, and investment themes change daily, the underlying characteristics of many businesses change much more slowly.
As a result, a significant portion of our work involves re-evaluating existing opportunities rather than constantly replacing them.
Throughout the quarter, we continued reviewing businesses, management teams, valuations, competitive positions, and alternative uses of capital. In many cases, the conclusion remained the same: the current assignment of capital continues to be appropriate.
Thoughtful investing does not require frequent activity. Often, it requires the discipline to maintain ownership when the original investment thesis remains intact.
Most client portfolios continue to be structured around two broad responsibilities:
Preservation Capital – assets intended to support anticipated spending needs and reduce the likelihood that market volatility forces the sale of long-term investments at unfavorable times.
Investment Capital – assets intended to participate in the long-term value creation of businesses.
Each serves a different purpose. Our responsibility is to continually evaluate whether capital remains appropriately assigned given available opportunities, risks, and client objectives.
At June 30, 2026, the firm's largest holdings across managed accounts included:
- ExxonMobil XOM (including hold restrictions)
- St Joe’s JOE
- Dick’s Sporting Goods DKS
While individual client portfolios differ based on objectives, spending needs, tax considerations, and account restrictions, these holdings represented a significant portion of capital across firm-managed accounts at quarter-end.
We continue to believe these opportunities compare favorably against available alternatives and remain worthy of long-term ownership.
Capital Assignment Decisions
While most portfolio holdings experienced little or no change during the quarter, we continually compare existing positions against available alternatives.
Our objective is not to do an activity for activity's sake. Rather, it is to ensure that capital remains assigned where we believe it has the greatest probability of achieving its intended purpose.
As opportunities evolve, capital occasionally moves from one assignment to another.
During the past twelve months, notable capital allocation decisions included:
Largest Addition
• Builder’s First Source (BLDR)
Largest Reduction
• Warner Bros. Discovery (WBD)
These decisions were not driven by short-term market forecasts, economic predictions, or headlines. Instead, they reflected our ongoing assessment of business quality, valuation, risk, opportunity cost, and the relative attractiveness of available alternatives.
Every investment competes for capital.
As stewards, our responsibility is to continually ask:
If we were starting with cash today, would this opportunity still deserve capital?
When the answer becomes more compelling, we may allocate additional capital.
When a more attractive opportunity emerges, capital may be reassigned.
Most quarters involve relatively few significant changes. We view this as a feature of the process rather than a limitation.
The businesses we own often evolve slowly, and meaningful long-term results frequently come from allowing sound decisions time to compound.
While individual transactions may receive attention, the larger objective remains unchanged: thoughtfully assigning capital to opportunities we believe are worthy of long-term ownership while maintaining sufficient preservation capital to support future needs and flexibility.
Business Developments
While stock prices often fluctuate daily, the underlying value of a business tends to change much more gradually.
As long-term owners, we spend considerably more time evaluating business developments than attempting to interpret short-term market price movements.
During the quarter, several businesses held across client portfolios reported developments that may influence their long-term value creation potential.
Warner Bros. Discovery (WBD)
Warner Bros. Discovery shareholders approved the company's pending acquisition by Paramount Skydance, with the transaction currently expected to close during the third quarter of 2026, subject to remaining regulatory approvals. During the quarter, the transaction continued to advance through various regulatory reviews, including receiving clearance from several jurisdictions and a favorable determination from the U.S. Department of Justice. We continue monitoring the remaining approval process and the expected closing timeline.
Cal-Maine Foods (CALM)
Cal-Maine Foods continued expanding its business beyond traditional shell eggs through acquisitions and investments in adjacent food categories. These initiatives are intended to diversify revenue streams, broaden the company's product offerings, and reduce dependence on egg market cycles. We continue monitoring management's capital allocation decisions and the company's execution as it seeks to build a more diversified food platform.
Dick's Sporting Goods (DKS)
Dick's Sporting Goods announced the acquisition of Foot Locker, a transaction that has the potential to strengthen the company's position within the athletic footwear and sporting goods marketplace. The acquisition expands Dick's reach across multiple customer segments while also introducing integration, execution, and capital allocation considerations that management will need to navigate successfully. We will continue evaluating the strategic and financial impact of the transaction as it progresses.
These developments are not important because they may affect next week's stock price.
They are important because they may influence the future earning power, competitive position, capital allocation opportunities, and long-term value of the businesses we own.
As always, our objective is to remain focused on the underlying businesses rather than the daily fluctuations of the market.
Your Situation
While market conditions, businesses, and investment opportunities continue to evolve, the most important variable remains your personal circumstances.
Changes in spending needs, employment, business interests, family situations, inheritance plans, health considerations, or long-term objectives can be every bit as important as changes occurring in financial markets.
If any aspect of your situation has changed, please let us know so we can review whether your portfolio remains appropriately aligned with your goals.
Thank you for the trust you place in us as stewards of a portion of your family's capital. We appreciate the opportunity to serve you and look forward to continuing that relationship.
Sincerely,
James Pope
Chief Investment Officer
Advisor.Investments
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Advisor.Investments [“AI”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from AI. Please remember that if you are a AI client, it remains your responsibility to advise AI, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. AI is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the AI’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request. Please Note: AI does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to AI’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.
