🏰 How to find Great Stocks
It’s #QualityTuesday!
In this series, I’ll teach you 5 things about the stock market in less than 5 minutes.
Before we start, I want to say thank you from the bottom of my heart. Since yesterday, Compounding Quality has more than 100,000 (!) loyal readers.
On the 31st of August, Compounding Quality has a big announcement to make so I would highly encourage you to stay tuned as the best is yet to come.
1️⃣ How to find Great Stocks
My entire investment philosophy visualized in one picture?
Look no further:
2️⃣ The best time to buy stocks
The best time to plant a tree? 20 Years ago. The second-best time? Today.
Time in the market is way more important than timing the market.
3️⃣ One simple investment quote
In the short term, investing is risky.
In the long term, not investing is risky.
If your investment horizon is at least 10 years, stocks offer the highest rate of return.
"How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case." — Robert G. Allen
4️⃣ It’s all about Cash Flow
In the end, (free) cash flow is all what matters.
In this thread you’ll find 6 important Cash Flow Ratios.
5️⃣ Example of a Quality Company
Kinsale Capital Group operates as a specialty insurance company. The Company markets and sells property, casualty, and specialty risk insurance products through a network of independent insurance brokers.
FCF Margin: 67.3%
ROIC: 31.0%
FCF Yield: 6.4%
Exp. FCF Growth (3 yr): 20.2%
CAGR since IPO: 58.2%
Receive my investable universe
As already mentioned, Compounding Quality has a big announcement to make on the 31st of August.
To make sure I provide as much value as I possible can to you, I am looking for a few people to give feedback on the idea I have.
I am looking for 20 people who have 5 minutes to look into something. Your reward? You’ll receive my investable universe of 150 quality stocks for free.
Since 2011, the investable universe increased with 1100% (!) compared to 184% for the MSCI World.
Reach out here if you want to help:
More articles from Compounding Quality
Do you want to read more? Here are our 5 latest articles:
That’s it for today
That’s it for today.
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About the author
Compounding Quality is a professional investor which manages a worldwide equity fund with more than $150 million in Assets Under Management. I’ve read over 500 investment books and spend more than 50 hours per week researching stocks.
As a longtime subscriber on Substack and Twitter I can not find such excellent and clear written investment knowledge somewhere else. Every week I am learning more and more about investing because of your work - Thank you. It would be an honour for me to make some time and help you with your idea.
I would love to make some time and give you feedback on the idea you have. I am a recently new subscriber and after going through lots and lots of past posts on here , I can say this information is all invaluable ! Thank you for sharing all of this.