Author: Smead Capital Management

The year 2026 has shown that deeply out of consensus investments in the portfolio have continued to reward investors. Our banks and energy companies continue to lead investment performance as they have over the last three years. While shareholders should enjoy this, we also want to talk about how these companies look versus where we started out with them. […]

When I was a child, we were told, “Starve a cold and feed a fever.” This appears to us to be what is going on in the stock market as we enter the fourth quarter of 2026. A massive capital investment cycle needed to build out data centers and invest in the inputs needed to use artificial intelligence has fed a feverish demand for money. Simultaneously, the U.S. Federal government is running huge budget deficits. This follows a spectacular performance, with relatively short interruptions in a 17-year bull run for the S&P 500 Index. This produced an incredible compounded return of 1,463.9%. […]

Most of the studies we’ve seen argue that 90% of the benefit of diversification comes by the 20th common stock. In our discipline, based on our eight criteria for common stock selection, we own 25-30 names. Halfway through this year, you can see the benefit of our diverse group of common stocks and also see that our eight criteria for stock selection began to shine like our long-term record indicates it has in the past. […]

The world we wake up to today seems to have all the information we can dream of, but less discernment than is needed. The Iran conflict was misread with oil prices at $100 and investors are doing the same thing at $70 oil now. We write this letter from the Calgary Stampede, one of the genuinely great events hosted globally. While we’ve been here, we have talked with all of the issuers we own in the oil business. The problem we are stampeding towards is real and time is the only cure. […]