
Quality Investing
Synopsis
Quality. We all make judgments about it every day. Yet articulating a clear definition of quality in an investing context is challenging. This book addresses the challenge, and distills years of practical investing experience into a definitive account of this under-explored investment philosophy.
Finance theory has it that abnormal outcomes do not persist, that exceptional performance will soon enough become average performance. Quality investing involves seeking companies with the right attributes to overcome these forces of mean reversion and, crucially, owning these outstanding companies for the long term. This book pinpoints and explains the characteristics that increase the probability of a company prospering over time – as well as those that hinder such chances. Throughout, a series of fascinating real-life case studies illustrate the traits that signify quality, as well as some that flatter to deceive.
The authors' firm, AKO Capital, has a strong track record of finding and investing in quality companies – helping it deliver a compound annual growth rate more than double that of the market since inception. Quality Investing sheds light on the investment philosophy, processes and tough lessons that have contributed to this consistent outperformance.
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Reviews
Investing is a continuous process of learning, and it will be a rare investor who does not glean substantive lessons from the notable AKO story of quality investing.Stephen Blyth, President and CEO, Harvard Management Company, Professor of the Practice of Statistics, Harvard University
Capturing both the science and the art that have driven AKO's success, Quality Investing is equal parts investing handbook and ode to the beauty of truly great businesses.Peter H. Ammon, Chief Investment Officer, University of Pennsylvania
Quality Investing answers the riddle of what you get when you cross Peter Lynch's One Up on Wall Street with Seth Klarman's Margin of Safety. By combining a discerning eye for sustainable growth with a disciplined calculus to buy over horizons when the probabilities are favorable, the book articulates a profitable approach to the art of investing.Jason Klein, Senior Vice President & Chief Investment Officer, Memorial Sloan Kettering Cancer Center
I recommend Quality Investing highly as a guide to harness the power of core investment principles. Shows why the best long-term 'margin of safety' comes not from an investment's price but from the value of a company's competitive advantage.Thomas A. Russo, Partner, Gardner, Russo & Gardner