Bird’s Eye View
Warren Buffett liked to look at his portfolio simply. He'd look at it as if it were all just one thing. He called this "look-through" earnings.
His exercise went like this: I have a portfolio of investments, some shares of Coke some shares of Apple etc. Those shares are ownership of those companies. Those companies run businesses. The value of a shares comes from the value of the business and the cash that business produces for owners. If I own 10% of coke and 10% of Apple, I get 10% of its business activity leftover for owners. Figuring out the business activity behind each share can tell me something about the business activity behind the portfolio.
Squint and you can see it
Lamplighter talks often about specific reasons that make specific investments interesting. Some of those turn out to be right! Those pieces, though, also need to work together. Lamplighter'll run its own portfolio with Warren's tool. This gives us an idea of whether they do work altogether.
For this adventure, Lamplighter'll leave off the “special situations” part of the portfolio. Those are often shorter term investments and don't necessarily relate to the day-to-day business activity of those companies.
The main portfolio — call it LampCo — grew sales per share 23% in 2025. It grew per share profit 26%. Both of these stack up pretty well. Companies in the S&P 500 grew topline 6.9%. They grew earnings 13%. LampCo did better on both counts.
So, there's more juice in LampCo than the broader market, but at what price? Is it just that Lamplighter's paying through the nose for growthy names?
The S&P ended the year producing about $4 of earnings for every $100 invested. LampCo? It drummed up $8 of earnings for every $100 invested.
To recap: Faster business growth. Faster profit growth. Better value. That'll work.
Look ahead
The past few years, Lamplighter has spit out various predictions for the coming year. Most of our thinking looks out farther than one year, so we try not to recycle the same predictions every year. This year, Lamplighter'll kick-off the year with three predictions about LampCo:
Revenue growth will slow in 2026 compared to 2025. The dollars of revenue growth will be larger though.
Gross margins will slip. But profit will increase.
There will be more changes to the mix of the portfolio's top five in holdings.
We'll see how we do with these in a year.
Disclaimer: None of this is investment advice. It's meant to illustrate ways LCM thinks about investing. Things that LCM decides are good investments for LCM and its clients are based on many criteria, not all of which are covered here. Some or all of LCM's ideas may not be suitable for other investors. LCM does not recommend investing either long or short any position mentioned. LCM may own positions in some of the companies mentioned. Some of its ideas will lose money — investing entails risk. See full disclaimer here.