It’s obvious that if a company generates high returns on capital and reinvests at high returns, it will do well. But this would not sell books, so there is a lot of twaddle and fuzzy concepts that have been introduced that don’t add to much / Charlie Munger

We look for businesses which are addressing a large market opportunity, possess strong and sustainable competitive advantages, have access to equally attractive reinvestment opportunities and a capable management team who is a good steward of shareholder capital. Such businesses can generate high returns on equity for long periods of time and compound shareholder capital.

These businesses are also rare and in a dynamic business environment, opportunity sets can diminish, new competitors can emerge and the investment thesis can get impaired. We spend a considerable amount of time on ongoing fundamental research to ensure our thesis remains intact.