⏰ The Eighth Wonder of The World
It’s why some retire comfortably while others fall behind
Hi Friend 👋
If you grasp the most powerful concept in finance, you’ll be better off than 99% of everyday investors.
This concept is so important that it’s given this newsletter its name…
… Compounding.
Some people call compounding a positive feedback loop or a snowball effect.
Einstein simply said it’s…
“The eighth wonder of the world.”
Compounding is so powerful because it’s based on the law of exponential growth.
Most people fail to recognize the implications of exponential growth.
It isn’t surprising.
Exponential growth rarely happens in everyday life.
Trees grow linearly, babies become teenagers linearly, and we travel at linear speeds.
Evolution didn’t give us an intuitive sense of things behaving exponentially.
But in the world of finance…
… Exponential growth is the reason some people can retire comfortably while others can barely make ends meet.
Let’s say Adam saves $1,000 a month and earns an average of 4% annually, compounded monthly across 20 years.
On top of the money he’ll have saved at the end of that period ($240,000)…
…Compounding will have put an extra $126,774 in Adam’s pocket.
A metric known as CAGR (compound annual growth) measures the exponential strength of an investment.
❓❓ What is a good CAGR?
A CAGR of about 9% is considered to be strong.
That’s similar to the S&P 500’s performance during the last three decades.
How did my Compounding Quality Portfolio do since inception?
It’s at a CAGR of 27.2%.
Of course, past performance does not guarantee future success, and I don’t expect to get a return of 30% per year in the long term.
So, to be conservative, let’s assume Adam invests $1,000 each month at a CAGR of 15%.
He’d make an extra $1.26 million on top of the money he saved after 20 years.
And at a CAGR of 27.2%?
(Like I said, this is the growth my Compounding Quality Portfolio delivered since inception.)
Adam would look at an astonishing $9.26 million after 20 years at that rate.
Again, no one can guarantee this rate of growth in the future.
It could be higher… it could be lower.
Most importantly, remember that all investments carry risk.
But the key is to…
Take good, intelligent risk.
That’s what my Compounding Quality Portfolio is all about.
All stocks in my portfolio have been vetted with my 7-factor CQ-method:
A wide moat: All companies in my portfolio are clear market leaders with strong pricing power.
High management integrity: Management has skin in the game. Their interests align with yours as an investor.
Low capital intensity: These companies require very little capital to maintain their current business and to achieve future growth.
Great capital allocation: Most of these companies’ cash is reinvested back into the growth of their businesses.
High profitability: The free cash flow margin of these companies is at least 15%.
Attractive historical growth: My portfolio positions managed to outperform the stock market for years and sometimes even decades in the past.
Secular trends: These stocks ride powerful trends. Think about themes like urbanization, AI, datacenters, semiconductors, or obesity. These sectors are only going to grow from here.
I believe in this method so much that ALL my investable assets are in this portfolio.
My success is your success. It’s all about having skin in the game.
How can you get access to my personal portfolio?
Access to my portfolio is reserved for Founding Partners.
The normal price to get in is $1,199.
Had you invested just $5,000 in my fully allocated portfolio, you’d have increased your position by $1,350.
Your subscription would’ve paid for itself within a year.
But I appreciate your continued support as a Compounding Quality reader.
That’s why I want to give you a much better deal today.
Right now, you can become a Founding Partner for the price of a regular membership, which is usually $499.
And with Black Friday around the corner, that’s not the only discount you’ll get.
I’m slashing an additional 20% off that price.
For a limited time, you can become a Founding Partner for just $399.
Here’s how it works…
Just subscribe to the Annual Plan before Sunday and you’ll be automatically upgraded to Founding Partner status.
The best part?
You’ll lock in this discount for as long as you’ll stay subscribed.
For $399, here’s everything you’ll get:
📈 My Personal Compounding Quality Portfolio full of quality stocks
✍️ Three articles per week (Tuesdays, Thursdays & Sundays
📚 Full access to our entire library of data-driven articles
🔎 Full investment cases about exciting companies
📊 Access to the Private Community
🎥 Private Zoom meetings with the CEOs of the companies we own
Here’s how members like their Compounding Quality subscription…
I can almost guarantee you’ll benefit greatly from becoming part of this community.
And most importantly…
You’ll get the opportunity to take full advantage of the power of compounding.
Remember, compounding works exponentially.
The earlier you make your move, the bigger your investment can grow.
So head over to this page, subscribe to the Annual plan, and you’ll be automatically upgraded to Founding Partner status.
This special discount is only available until Sunday.
So please, don’t miss out on this unique deal.
Everything In Life Compounds
Pieter
