Despite tumult on financial markets, it was an uneventful year was for Standard.

The bad news first: even after dividends, we lost roughly half of our capital in Washington Prime Group. That marks our third venture into the forever-distressed world of commercial real estate—and our third straight failure. At some point, persistence begins to look like obstinacy. This letter is, fittingly, about self-inflicted bruises.

Exhibit A: through a related family-controlled vehicle, we bought shares last spring in the French advertising giant Publicis. As the pandemic broke over Europe, Publicis—owner of first-rate creative franchises and carrying essentially no debt—saw its market value collapse to levels unseen even during the depths of 2008.

For a short spell the stock traded at four times earnings, a price that bore no relation to the underlying economics of an oligopolistic business with a highly adjustable cost base and a remarkable edge: each year, for a small slice of its free cash flow, it can simply buy the upstart agencies that nip at its heels—absorbing talent, folding in new accounts and neutralizing competition in one swipe.

Publicis also enjoys a sticky, diversified client roster—arguably healthier than those of its two closest competitors. Corporations and governments alike must rely on the global networks to run coherent, cost-effective, cross-border campaigns. That list of global networks is short, and Publicis has long been among the most capable.

So we bought shares—and committed an egregious error. Knowing the odds in a given situation is only half the craft; the other half, the one that matters, is sizing the bet. Here we flinched. Though our Publicis stake nearly doubled within months, our position size—whether out of fear, incompetence or a neat blend of both—was the smallest we have taken in eight years. The result: negligible impact on overall returns.

Elsewhere, we doubled down in the Canadian oil patch, adding to Peyto Exploration & Development and Gear Energy in the middle of what still feels like a nuclear winter for the sector. And among large, better-known names we think Suncor may be one of the more obvious bargains in today’s equity markets. We are in discussion with a partner to structure an investment through a vehicle we would co-manage. More on that in due course.