Caterpillar Cowboy

1) Fundamentals matter more than ever. I like this quote from the letter:

I still strongly believe that investing in strong free cash flow streams generated by good businesses is the best investment we can make. These business franchises with pricing power are more likely to protect us against future inflation. Even if we are headed into deflation, free cash flow is a good thing to own. In addition, our continued focus on balance sheets, which includes understanding liabilities and credit exposure, is helping us in this environment. We could not call the top of the market and we will not be able to call the bottom. Our strategy is as it has always been, to own an unleveraged portfolio of strong business franchises at attractive valuations.