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Ep 382. Franchise Value, The Secret to Geoff Gannon’s Investing, and Analyzing Airline Stocks

Focused Compounding

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Compounding Buffett's Preference for Stable Operating Margin

I think it's like growth in EPS. I mean, just compounding buffet thinks always in terms of compounding. Andrew recently tweeted focus compounding's preference for avoiding businesses that sometimes earn 15% or worse on that tangible equity. He also recall you in past podcast slash writings discussing your strong preference for very stable operating margins. Stability is better the volatility all else equal. But what about the idea of taking a lumpy 15% over a stable 10% as Buffett has said and or some volatile businesses being attractive? Why the marriage to stability each year?

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