In this engaging discussion, Pieter Sleger, founder of the Compounding Quality newsletter and a quality investing expert, shares his journeys in stock investing. He reveals insights on identifying great businesses, especially those with strong management and healthy balance sheets. Pieter emphasizes the concept of economic moats as sustainable competitive advantages and highlights the importance of pricing power in companies. He also discusses strategies for maintaining a savvy investment watchlist and the significance of Return on Invested Capital (ROIC) in evaluating potential investments.
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question_answer ANECDOTE
First Stock Pick
Pieter Sleger's first stock pick at age 14 resulted in a 60% loss.
This painful experience motivated him to learn more about investing.
volunteer_activism ADVICE
Investment Strategy
Choose an investment strategy that aligns with your personality and risk tolerance.
Thorough research and conviction are crucial for long-term success.
insights INSIGHT
Quality Investing vs. Value Investing
Quality investing focuses on the best businesses, minimizing active trading.
The margin of safety lies in the company's moat, not its valuation.
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In this episode, we chat with Pieter, founder of the Compounding Quality newsletter, as he shares insights on quality investing, identifying great businesses, and his journey in the world of stocks.
00:00 - 00:07: Introduction of Pieter and his credentials, including his newsletter and book on quality investing.
00:08 - 02:37: Pieter explains why he chose to invest in stocks and shares his early experiences, emphasizing the long-term potential of equities.
02:38 - 07:16: Discussion on Pieter's first stock investment, mistakes he made, and how those experiences led him to educate himself on investing.
07:17 - 12:21: Pieter describes his approach to quality investing, focusing on finding great businesses with healthy balance sheets, led by strong management, and trading at attractive valuations.
12:22 - 15:02: Pieter discusses how he maintains a watchlist of potential investments and his focus on companies with high market caps.
15:03 - 20:49: Detailed discussion on the concept of economic moats, emphasizing the importance of investing in companies with sustainable competitive advantages.
20:50 - 24:04: Further elaboration on pricing power, with examples of companies that have successfully maintained high pricing power.
24:05 - 32:14: Insights into Pieter’s thoughts on return on invested capital (ROIC), its importance in identifying quality investments, and the challenges of disruption in quality investing.
32:15 - 49:02: Pieter's approach to valuation, including how he assesses whether a stock is overvalued or undervalued, using methods like forward P/E comparisons and reverse DCF.
49:03 - 56:56: Pieter discusses his ideal investment, focusing on companies with strong growth, reinvestment opportunities, and aligned management. He also shares his thoughts on the tools and platforms he uses for research.
56:57 - End: Conclusion, with Pieter offering to connect with others interested in quality investing and sharing where to find his resources online.
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