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StrategyRisk: High· Time: HighQuality

Buffett Quality

8–15 quality companies with a moat, ROE above 15%, and skin in the game

A concentrated portfolio of businesses you understand, with a durable competitive advantage, high profitability, and committed management. Buy at a reasonable price — and hold for a long time.

Principles
  • Only invest in businesses you can explain in one sentence.
  • The company must have a moat that holds up for decades.
  • Management must have their own money in the company.
  • The price must be reasonable relative to the industry average — otherwise wait.
Rules
  1. 1.All six Buffett criteria must be answered YES before buying.
  2. 2.8–15 positions — no more.
  3. 3.Hold at least 5 years unless the thesis has changed.
  4. 4.5% cash as dry powder for when quality companies get cheap.