No Investment is so Wonderful One of the Big Mistakes Value Investors Make

Pay up for Quality

I’m probably more willing to pay up for quality than other value investors might be. Some of my investor friends often tell me my ideas are “too high-quality” for them. I would distinguish somewhat here from paying up for growth – I’ll pay more for a high-quality, slow-growing business. I look for companies that will grow value, not necessarily revenue, at above-average rates. On average, our typical investment is 30-35% cheaper than we think it ought to be and we think it’s increasing value at 15-20% per year on top of that.