This text presents a letter from Warren E. Buffett dated February 11, 1959, offering insights into the stock market of 1958 and his investment strategy. Buffett observes an "exuberant" and "mercurial" market psychology among investors, which he believes could lead to future trouble despite his focus on undervalued securities rather than market forecasting. He reviews the strong performance of his partnerships in 1958, outperforming the Dow-Jones Industrial Average, and explains his approach through a case study of Commonwealth Trust Co., illustrating how he acquired a significant stake in an undervalued bank and later sold it for a substantial profit. Finally, Buffett discusses his current challenge in finding attractive investments in a high market and his strategy of creating "work-outs" by taking large positions in undervalued companies to ensure above-average performance, especially in a declining market.