The Intrinsic Value Podcast - The Investor’s Podcast Network
MI367: How to Invest in the Best of the Best: Quality Investing w/ Shawn O'Malley
Sep 2, 2024
Shawn O'Malley, an expert in Quality Investing strategies, shares insights on how to identify outstanding companies for long-term ownership. He distinguishes Quality Investing from value investing by emphasizing a buy-and-hold approach. O'Malley discusses the critical role of pricing power in top-tier companies and explores Chuck Akre's unique three-legged stool framework. The conversation reveals Jim Collins' research on enduring firms and Chris Mayer's methods for uncovering potential 100-to-1 stocks, making a compelling case for viewing quality investing as an art.
54:56
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Quick takeaways
- Quality investing prioritizes owning exceptional companies for the long term, focusing on resilience and performance rather than short-term price fluctuations.
- Strong competitive advantages and stable financials, characterized by wide economic moats, are essential indicators of high-quality companies for long-term investments.
Deep dives
Understanding Quality Investing
Quality investing focuses on owning exceptional companies that are capable of delivering long-term compounded returns, distinguishing itself from value and growth investing strategies. Quality investors typically assess a company's resilience and performance over the long haul, often holding onto their investments even during periods of high valuation. This approach encourages an emphasis on a company's competitive position, durability, and the ability to consistently generate earnings. Thus, quality investors prioritize businesses that meet their criteria for quality, often described as companies that are positioned to thrive over decades.
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