Buying our First Stock

Today, the Compounding Quality Portfolio will launch.

This means we’ll buy our first stock.

Let’s walk this beautiful investment journey together and build a great portfolio.

Portfolio Rules

Good agreements make good friends.

As we are Partners in this, I will treat you just the way I would like to be treated myself.

“We have an attitude of partnership. Charlie Munger and I think of our shareholders as owner-operators.” – Warren Buffett

Here are the Portfolio Rules:

• You can follow the Portfolio 24/7 with 100% transparency

• The portfolio will consist of a fictional amount of $1 million

  • For every company and transaction, you’ll know what percentage will get invested.

  • This allows you to know the conviction Compounding Quality has in every company and transaction

• No front-running

  • Compounding Quality will never buy a stock before you have to chance to do so (after doing your own homework - read the disclaimer)

  • Every Sunday, we’ll communicate about new transactions and these transactions will be executed the day after (on Monday)

First Stock

The first stock we’ll buy is a Quality Cannibal Stock:

• The company has one of the best-in-class loyalty programs in the United States

• Capital light business model with attractive margins

• Revenue has grown at a CAGR of 17.6% over the past 15 years

• The company trades at the cheapest valuation level it has traded at over the past decade

• They should be able to buy back 50% (!) of outstanding shares over the next decade

• The stock compounded at 25.5% per year since its IPO 15 years ago

Let’s dive into the 33-page Investment Case and prepare our transaction for tomorrow.