Understanding Quality Companies and Pricing Power

4min Snip

00:00

Play full episode

Summary

Transcript

Episode notes

This chapter investigates how high-quality companies maintain their pricing power, especially during economic disruptions such as the pandemic. Using Chipotle as a central example, it highlights key characteristics that enable these companies to raise prices while keeping customer loyalty intact.

In today’s episode, Shawn O’Malley (@Shawn_OMalley_) breaks down different investors’ approaches to finding the best of the best companies to own. It’s a strategy known as Quality Investing, and it differs from value investing because quality investors are more focused on finding companies to own forever, as opposed to selling them if they rise above their current intrinsic value.

You’ll learn how definitions of quality vary, how quality investing is still rooted in value investing, what the patterns and building blocks of high-quality companies are, why pricing power is a great way to identify quality businesses, how Chuck Akre approaches quality investing, what Jim Collins’ research on enduringly great companies reveals, and how Chris Mayer finds stocks with 100-to-1 returns—plus so much more!

IN THIS EPISODE, YOU’LL LEARN

00:00 - Intro

02:15 - How Quality Investing traces back to Ben Graham

03:10 - What quality investing is generally, and how it differ from other strategies

03:32 - What are the patterns and building blocks of quality businesses

07:51 - Why pricing power is so important to quality stocks

12:37 - How Chuck Akre’s three-legged stool approach to quality investing works

22:12 - What Jim Collins’ intensive study of enduringly great companies reveals for investors

29:57 - How Chris Mayer finds stocks that generate 100-to-1 returns

32:46 - How to define and determine whether a company has a winning corporate culture

41:55 - Why quality investing is really an art form

And much, much more!

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members.
Compounding Quality’s Investing Philosophy.
Three-Legged Stool Masterclass.
Chris Mayer’s blog
Jim Collins' book, Built to Last.
Thomas Peters' book, In Search of Excellence.
Michael Porter's book, Competitive Advantage.
Lawrence Cunningham's book, Quality Investing.
Thomas Phelps' book, 100 to 1 in the Stock Market.
Jim Collins' book, Good to Great.
Chris Mayer's book, 100 Baggers.
Long Equity's book, The Intelligent Quality Investor.
Check out the books mentioned in the podcast here.
Enjoy ad-free episodes when you subscribe to our Premium Feed.

NEW TO THE SHOW?

Follow our official social media accounts: X (Twitter) | LinkedIn | Instagram | Facebook | TikTok.
Check out our Millennial Investing Starter Packs.
Browse through all our episodes (complete with transcripts) here.
Try Kyle's favorite tool for picking stock winners and managing our portfolios: TIP Finance.
Enjoy exclusive perks from our favorite Apps and Services.
Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets.
Learn how to better start, manage, and grow your business with the best business podcasts.

SPONSORS

Support our free podcast by supporting our sponsors:

Connect with Shawn: Twitter | LinkedIn | Email

HELP US OUT!

Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it!

Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Learn more about your ad choices. Visit megaphone.fm/adchoices

Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm