anchor

An anchor does not stop a ship from moving. It stops it from drifting. The ship still swings with the tide and the wind; it simply comes back to the same place.

A holding company is made of things that move at different speeds. Some grow quickly and need attention every week. One or two grow slowly and need almost none. The slow ones are the anchors.

An anchor holding is one you would keep through a bad decade. It earns enough to pay for its own mistakes, and it teaches the faster holdings what lasting looks like.

• It does something people will need in thirty years.
• It needs capital less than it needs time.
• Its people would run it the same way if nobody were watching.

The third is the hardest to check, and the only one that matters when the tide turns. See capital.