Giverny Capital Asset Management Q2 2026 Investment Letter: Market Dispersion and Earnings Growth
Giverny Capital Asset Management's Q2 2026 investment letter reports a net portfolio return of 13.70% for the quarter, underperforming the S&P 500's 15.20% return. Year-to-date, the portfolio returned 5.89% net versus the index's 10.21%. The letter highlights significant market dispersion: while the S&P 500 returned 10.2% in H1 2026, 210 stocks had negative returns and about 200 outperformed. The fund manager notes that many of their holdings, including Charles Schwab, JP Morgan, Mastercard, and Progressive Corp., continue to grow earnings per share at healthy rates but have lagging stock prices. Schwab is cited as trading at 12 times 2027 EPS estimates despite expected 25% annual earnings growth. The fund added to positions in Schwab and Progressive during the quarter. The letter argues that short-term market psychology (voting machine) is causing divergence from long-term earnings fundamentals (weighing machine).
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