Hi Partner 👋
It’s time to update our watchlist.
The Buy-Hold-Sell List helps you track Our Investable Universe.
Are there some attractive opportunities today? Let’s find out.
Your Brain
One of the greatest investors of all time? Peter Lynch.
He once said the following about investing:
“Everyone has the brain power to make money in stocks. Not everyone has the stomach.”
Right now, Mr. Market is testing investors’ patience.
Turn on CNBC or look at the S&P 500, and everything seems perfect.
The index is trading near all-time highs:
But if you look under the surface?
It’s a completely different story.
The majority of the index is in a structural bear market:
Because the S&P 500 is weighted by market cap, a handful of large tech companies are pulling the index up.
But, many fantastic, high-quality companies are currently in deep drawdowns.
The hardest part of investing
It is very difficult psychologically to watch a position in your portfolio go down while the headline index goes up.
It makes you doubt your strategy.
Did I make a mistake?
Is the moat broken?
Does the market know something I don’t?
But here is the secret of great investors:
The best time to buy a wonderful business is usually when it feels the worst.
When price disconnects from reality
Over the long term, stock prices follow earnings.
In the short term, stock prices follow emotions.
Here’s Peter Lynch again:
Often, there is no correlation between the success of a company’s operations and the success of its stock over a few months or even a few years. In the long term, there is a 100 percent correlation between the success of the company and the success of its stock. This disparity is the key to making money; it pays to be patient, and to own successful companies.
When a stock drops, you need to ask yourself a question:
Did the business get worse, or did the valuation just got cheaper?
Let’s look at a great example recently highlighted in the Community.
Stryker ($SYK)
How does the company make money?
Stryker makes money by selling medical devices and equipment to hospitals and surgeons. Think about implants like hip and knee replacements. They also sell surgical tools, hospital beds, emergency equipment…
Stryker is a fantastic, boring business.
They are a global leader in medical devices.
Stryker specializes in orthopedic implants and surgical equipment.
People don’t stop needing joint replacements or surgical procedures because of the economy, interest rates, or the latest developments in AI.
But over the past year, Stryker’s stock price is down over 20%:
If you only looked at the stock price, you would assume the business is losing hospital contracts and bleeding cash.
But what actually happened to the fundamentals?
Revenue keeps hitting record highs (over $25 billion in 2025 with double-digit growth).
Net income and Earnings Per Share (EPS) are growing steadily.
The company keeps selling more robotic surgery systems into more global hospitals.
The business is more valuable today than it was a year ago.
It is generating more free cash flow, installing more equipment, and serving more patients.
But because Mr. Market is moody, you can buy those growing cash flows for a lower price today than a year ago.
For Quality investors like us, this kind of disconnect is what we’re looking for.
One trick to help you stomach these times?
Focus on the fundamentals while everyone else focuses on the stock price.
That’s why I think the most important chart for Our Portfolio is this one:
It shows the Free Cash Flow the Portfolio has generated for us every single year.
The message?
The underlying values of Our Businesses keeps growing.
No matter what the stock prices do in the short term, as long as the FCF keeps growing, the stock prices will be higher in 10 years from now.
Update Buy-Hold-Sell List: October 2026
Let’s now update our Buy-Hold-Sell List.
The Buy-Hold-Sell List helps you find new investment ideas.
Let’s take a look at some amazing investment opportunities.
Worst performers
Here are the 10 worst performers on our watchlist so far this year:
Best performers
The 10 best performers look as follows:
Changes in the Buy-Hold-Sell List
Now let’s look into the changes on our watchlist.
One company went from Hold to Buy:
Stryker ($SYK): Manufacturer of orthopedic implants, surgical equipment, and neurotechnology
Currently there are 58 stocks on ‘Buy’.
You can download the entire Buy-Hold-Sell List here: