The Concept of Compounders

A compounder is defined as a high-quality business with excellent management that has shown consistent performance over time, leading to significant returns for shareholders. These businesses have a history of compounding capital, typically outperforming the market over long periods. The discussion emphasizes the importance of owning these compounders as they represent a long-term investment strategy focused on fundamental growth. Examples mentioned highlight that not every popular stock qualifies as a compounder; even a recent surge in value does not indicate long-term performance.