MI349: The Quality Quest: Building Wealth, One Quality Investment At A Time w/ Compounding Quality
The Intrinsic Value Podcast - The Investor’s Podcast Network
The Investor's Podcast Network
4.6 • 592 Ratings
🗓️ 30 April 2024
⏱️ 73 minutes
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| 0:00.0 | You're listening to TIP. |
| 0:03.0 | I would say the most important thing here is, well, to really get out the noise. |
| 0:08.5 | Don't focus on the quarter of results and focus on decades instead. |
| 0:12.9 | And I think the best example of this, and I'm a huge fan is Francoiseuio Scha. |
| 0:17.0 | You also know them. |
| 0:18.9 | Well, last week he published this latest annual shareholder letter, and each year he compares |
| 0:24.7 | the stock price or the performance of his spend with the owner's earnings of the businesses, |
| 0:29.8 | and the owner's earnings are simply calculated by doing the EPS or adding the EPS for the |
| 0:35.9 | dividend yield. |
| 0:37.1 | And what you see is that since 1996, well, his portfolio returns 2,887%, and the owner's earnings |
| 0:45.6 | were equal to 2,859%. |
| 0:49.3 | So in the very long term, well, stock prices follow the owner's earnings almost exactly. |
| 0:59.8 | Compounding quality has spent thousands of hours researching and implementing the tenets of |
| 1:04.1 | quality investing. As a former hedge fund analyst, he spent time doing the duties that most |
| 1:08.5 | analysts have to do. Things like reading broker reports, |
| 1:11.9 | looking for businesses beating analysts estimates, and other things that aren't relevant for long-term |
| 1:16.8 | investors. So once he could leave the hedge fund world and focus on his true passion, quality |
| 1:21.2 | investing, he could leverage his time to explore the complexities of quality investing as much |
| 1:26.3 | as he pleased. Compounding quality is very |
| 1:29.1 | talented at sourcing and creating investing material that is easily consumable, entertaining, and highly |
| 1:34.2 | informative. As a result of his research and skills and educating others, he built a massive |
| 1:39.0 | following of people, including names like Bill Ackman, Jeff Bezos, and LeBron James. If you are the |
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