Open the Tape this morning and the colour you will see most of is moat green. Three out of every four businesses we cover have a positive Δ%, meaning Mr. Market is offering them at a price below the protocol's estimate of their intrinsic value. Of those, eleven sit comfortably within the twenty-five-percent margin-of-safety threshold — the protocol flags them BUY. A casual reader, glancing at this and at the editor's note at the top declaring Mr. Market to be in a depressed mood, would be forgiven for asking whether the editors have collectively decided to declare a bull market. We have not.

What we have done is run a discipline. The protocol does not adjust its expectations to match the mood of any particular morning. It uses the same inputs every day — the most recent annual filing for each business, the forward analyst consensus capped at twenty percent, the long Treasury yield, a fixed twenty-five percent margin of safety. When the prices the market is asking sit well below the values the protocol calculates, the protocol marks BUY. It does not weigh whether the timing is right. It does not consider whether the macro environment is hospitable. It does not have a view on the election, or on the next CPI print, or on what Jay Powell said yesterday. It applies the formula. The discipline is the product.

The protocol does not have a view on the election, or on the next CPI print, or on what Jay Powell said yesterday. It applies the formula.

A reasonable reader might next ask whether the protocol has, in this case, simply produced a lot of false signals. This is possible. The eleven BUY flags currently lit are spread across consumer staples (Costco, Procter, McDonald's), healthcare (Johnson & Johnson, Eli Lilly), industrials (Caterpillar, Union Pacific), and energy (Occidental, Chevron) — sectors that have, structurally, lagged the cap-weighted S&P 500 over the past five years. The cap-weighted index is dominated, in 2026, by the so-called Magnificent Seven and a small handful of artificial-intelligence-adjacent names. Our universe of thirty includes those names but does not over-weight them. The mathematical consequence is that our protocol, applied to our universe, is more likely to register a positive Δ% on a defensive business in any window when defensive businesses have underperformed.

We are not, here, complaining about this. The protocol is built to do exactly what it is doing. Buffett's temperament, as a buyer, was to be most active when the market was distracted by the spectacle of someone else doing well elsewhere. The mood today, on our universe, has the temperature he would have recognised — not panicked, not euphoric, just steadily uninterested in the businesses that produce predictable cash. A subset of those businesses, we believe, deserve more interest than they are presently receiving.

What this dispatch is notis a recommendation to act on all eleven BUY flags this morning. The flags are statements about price relative to value, not about timing relative to the news cycle. Several of the eleven may well decline further before they rise. One or two may turn out to have been correctly priced and the protocol's number turn out to have been optimistic. We will not know which until the math is allowed to run for longer.

For the patient owner reading this in May of 2026: the move is not to act on eleven names at once. The move is to maintain the watchlist, read the reckonings on the names you find most defensible, and write the cheque, deliberately, on the one or two that you have followed long enough to feel comfortable with. The depressed mood today is favourable for buying. It is not an instruction to buy everything.

— The editors