The Buffett Playbook Works in Bonds Too: A Discussion With Canso Investment Counsel

Most investors have been taught that bonds are there for safety and income, not for making money.

That belief isn't wrong.

It's just incomplete.

Bonds don't reward excitement or bold predictions. They reward patience, judgment, and preparation. Anyone who admires Warren Buffett will recognize this way of thinking.

The same principles that underpin his success in stocks apply just as powerfully in bonds. The mechanics are different. The mindset is the same.

If you're reading this thinking "I'm not interested in bonds," good. That's the mindset that creates opportunity. The best returns in bonds often come from strategies that don't look like traditional bond investing at all.

Below are a few key ideas from a recent conversation (recorded on January 9th, 2026) I had with Faisal Ahamed of Canso Investment Counsel, explained in plain English, with links to specific moments if you want to hear them directly.

Bonds Aren't Inferior. They Just Work Differently.

A lot of frustration with bonds comes from comparing them to stocks. Stocks grow visibly. Bonds work quietly.

In credit, money is made by being paid appropriately for risk. That means understanding spreads, knowing who you're lending to, and recognizing when you're being compensated and when you're not. Bonds don't need excitement to work. They need discipline.

"In bonds, you need to be paid for the risk you're taking."

In this part of the conversation, we walk through how bond investors think about making money in plain terms, without jargon or forecasting.

Watch this moment: How Money Is Made in Bonds
17:50 – 19:45

When bonds are approached this way, they stop being "the boring part" of a portfolio. They become a place where thoughtful decisions, made at the right time, can produce meaningful results.

In Bonds, the Big Question Is "What If This Goes Wrong?"

One of Buffett's most important ideas is simple: avoid permanent loss.

In bonds, that principle is front and centre. Before worrying about return, experienced investors ask a different question: what happens if this breaks? What do we recover? Where do we sit in the capital structure?

"We always start by asking what we can recover if something goes wrong."

This becomes very real in the discussion around Credit Suisse. Two bonds from the same company produced completely different outcomes. One recovered capital. The other was written down to zero. The difference wasn't luck. It came down to structure and preparation.

Watch this moment: Two Bonds, Same Issuer, Very Different Outcomes
14:40 – 17:10

 

This focus on downside isn't pessimism. It's survival. And survival is what allows investors to stay in the game long enough for strong returns to emerge.

Patience Isn't Passive. It's Part of the Plan.

One of the hardest things for investors to do is wait.

In bonds, waiting is often the strategy.

When markets are calm and investors are reaching for yield, disciplined managers are often willing to earn less in the short term. That patience preserves flexibility, the ability to act when opportunity finally appears.

"If you're not being paid for risk, we're willing to wait."

In this part of the conversation, Faisal talks about liquidity not as a technical term, but as readiness. Being ready matters more than being busy.

Watch this moment: Liquidity Is a Superpower
19:51 – 24:02

Patience feels uncomfortable precisely because it works. The willingness to wait is often what separates modest outcomes from very strong ones when markets shift.

Thinking Independently Is Hard. That's the Point.

Independent thinking sounds appealing until it creates discomfort.

In practice, it means resisting pressure to follow the crowd, staying disciplined when others aren't, and being willing to look wrong before being proven right. This is especially true when spreads widen and fear enters the market.

"You can't compare yourself to competitors. You have to stick to your process."

This section shows how discipline during uncomfortable periods can create opportunity, not because investors are being contrarian for the sake of it, but because they're sticking to a process.

Watch this moment: When Spreads Widen, Discipline Pays
24:10 – 27:00

Independent thinking isn't rewarded immediately. But over full market cycles, it's often one of the clearest paths to strong investment outcomes.

Simple Doesn't Mean Shallow.

Buffett has always emphasized simplicity: understand what you own and why you own it.

That doesn't mean avoiding complexity. It means not letting complexity obscure judgment.

"We focus on what we understand and avoid what we don't."

The most effective bond investors focus on what they understand, break complicated situations into manageable pieces, and say no far more often than yes.

Watch this moment: Simple, Not Simplistic
29:40 – 31:44

This kind of simplicity helps investors avoid unnecessary losses and be ready for opportunities others miss, a combination that can quietly drive strong returns over time.

Why This Matters

These ideas matter beyond bonds. They're about how you approach any decision where capital is at risk: focus on downside before upside, be patient when others rush, resist fashionable thinking. Bonds simply make the trade-offs clearer and the consequences faster.

That may be Buffett's real legacy. Not the specific investments he made, but the seriousness with which he approached decision-making. That playbook still works, even in bonds.

 

Matthew Williams, CFA

Senior Portfolio Manager, Investment Advisor

Williams & Associates, Wealth Stewardship | Richardson Wealth Limited

 

Watch the full conversation: