🌱 Why We Are Partners
My Life's Work Explained
Hi Partner 👋
As you know, I always start every article calling you a Partner.
Why? Because we actually are. We are in this together.
We already wrote this in the Owner’s Manual back in 2023.
As a reminder, I have all my investable assets invested in the companies I write about.
Your success is my success and the other way around.
It’s the only right way.
As Charlie Munger said:
“I think I’ve been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it. And never a year passes but I get some surprise that pushes my limit a little farther.”
The reason I’m writing this article today is this email I received:
To be honest, this email truly touched me.
It meant a lot to me.
Sometimes it’s easy to forget that we are all human beings and like to be appreciated by other people.
All my dedication, passion and effort goes into Compounding Quality.
This truly is my life’s work.
I’m incredibly grateful that I am able to make a living from my passion.
And that’s thanks to you, invaluable reader.
It’s also why I appreciate everyone in the Community so much:
The goal?
Reach financial independence and help each other along our journey.
Because as Charlie Munger said:
At Compounding Quality, we use Quality Investing to make our investment decisions.
There are multiple roads that lead to heaven.
You should pick the investment style that suits you best.
What is important?
Pick an investment strategy that suits you
Pick an investment strategy that has proven to outperform the market
Quality investing fits both criteria:
The same is true when your banker recommends you a certain investment product.
You should always ask him or her two questions:
Are you invested in this product yourself?
Does this investment product have a great track record?
Only move forward when the answer is ‘yes’ on both questions.
Spoiler alert: not too many bankers will pass both criteria.
And that’s exactly why Compounding Quality was born.
To genuinely do the right thing.
To help you, an invaluable Partner.
I can’t feel more grateful to write and analyze for you.
Today, Compounding Quality has well over 1 million readers across all channels.
Let’s give you an even better insight about Compounding Quality.
My Daily Routine
A lot of Partners ask me about my daily routine.
Let me confess something to you: I’m maniacally focused on productivity.
Books like Atomic Habits, Eat That Frog, and Deep Work all say the same thing:
If you focus on being productive, you can get as much done in 2 or 3 hours as the average worker does in a whole day.
I stand by this statement.
That’s why:
I (almost) never do meetings before 3 PM my time (consider yourself special if I do)
I structure every single day the same way
Here’s what a usual day looks like:
That’s a 13.5 hour working day.
Every. Single. Day.
This intense working schedule is not for everyone.
I work 7 days out of 7 (less hours during the weekend, however).
The only way you can do this is, is when this truly is your passion.
Compounding Quality is my life’s work.
You’re an invaluable reader.
It’s my moral duty towards you.
I need to keep learning and provide you with as much value as humanly possible.
This passion also comes at a cost: it’s a very intense lifestyle.
Not everyone in my direct environment understands or supports this kind of way to live your life.
What’s important to highlight? The most important thing at the end of your life is not how much you worked.
It’s all about love.
How much love you gave and received.
I loved this tweet from Kevin | Large Fam Dad:
My boss’s boss is like 42, never married, no kids. Earns $275-300K per year. Goes on a minimum of two international vacations a year w/ his girlfriend. 10+ days, all out.
Eats the best food, stays in top notch accommodations. Excursions, tours, nicest beaches, etc.
Great guy, I’m happy for him.
But what I’ve realized is that without kids, you end up chasing a lifestyle that has to continually be topped in order for you to be satisfied and find happiness.
What he and others like him don’t understand is that when you have children, seeing THEM experience life’s most basic things and watching their eyes light up at all the “firsts”, brings greater pleasure and joy than any vacation or travel experience ever could.
Seeing THEM try blueberries for the first time is greater than dining at the best 5 star restaurant in Europe.
Seeing THEM learn how to walk is greater than walking the Great Wall of China or strolling along the most picturesque beach.
Watching THEM giggle uncontrollably at “peek-a-boo” tops any A-list comedian act.
Seeing THEIR excitement when building a fort out of cardboard boxes and making a door big enough for daddy is superior to staying at 5-star resorts.
Flying kites with THEM far outweighs excursions like parasailing or helicopter rides.
Seeing THEM perform a recital on stage for the first time is more rewarding than watching a Broadway show or top notch symphony orchestra.
When you have children, all of a sudden you realize that life’s greatest joys are not in the pursuit of things or pleasure or travel, but rather in the LOVE and bond you share with your very own image bearers.
Seeing the beauty and magnificence and wonder of life all over again for the first time through THEIR eyes and expressions gives you something the world simply cannot offer, nor even come close.
How my thinking has evolved
As an investor and human being, you need to be a learning machine.
As Charlie Munger said:
It would be very naive stating that the (investment) thoughts you have today will be the same 10 years from now.
Let’s hope we make a lot of progress over the next 10 years.
Why? Because to stand still is to go backwards.
We have made poor investment decisions in the past.
Let me be clear… I feel personally responsible for them.
There is only one person to blame: me.
I want to personally apologize for that.
Here are a few painful examples:
Selling Ulta Beauty in March 2025. The stock is up +50% since then
Buying Judges Scientific in April 2025. The entire market for scientific instruments (especially Judges) is struggling right now
Buying Novo Nordisk because I thought the stock was cheap. Up until now, the stock only became cheaper
And these are just a few examples.
I think we should always keep the rule of three by François Rochon in mind:
One year out of three, the stock market will go down at least 10%
One stock out of three that we buy will be a disappointment
One year out of three, we will underperform the index
It’s fair to say that I will keep making investment mistakes going forward.
The most important thing is to minimize them as much as possible.
The things that I can guarantee are the following:
I will always openly communicate about my mistakes in an honest way
I will do everything I can do to minimize mistakes as much as possible
Our incentives are aligned. I have all my money in these companies
What comes next for Compounding Quality
Going forward, we’ll keep focusing on executing our strategy relentlessly.
The strategy already outlined in the Owner’s Manual in 2023.
As a reminder…
Compounding Quality is not for you if you want to:
❌ Get rich quick
❌ Blindly follow someone’s else’s advice
❌ Outperform the market every single year
You are in the right place if you want to:
✅ Learn and become a better investor
✅ Be assisted alongside your investment journey
✅ Outperform the market in the long term
The essence of the portfolio is very simple:
Buy wonderful companies
Led by outstanding managers
At fair valuation levels
We want to invest in the best companies in the world.
The portfolio will consist of 3 buckets, as you can see here:
1. Owner-operator stocks
Owner-operator stocks are companies that are still run by their founder
Academic studies found that family companies and founder-led companies outperform the S&P500 with 3.7% per year and 3.9% per year respectively
“Some of our key managers are independently wealthy. They work because they love what they do and relish the thrill of outstanding performance. They unfailingly think like owners. It are the best kind of managers we can wish for.” - Warren Buffett
2. Monopolies and oligopolies
Only one or a few companies dominate the entire industry
Monopolies and oligopolies are usually great investments because they are able to operate at attractive conditions due to the lack of competition
“Over the years, Buffett followed his philosophy of buying into industries with little competition. If he can’t buy a monopoly, he’ll buy a duopoly. And if he can’t buy a duopoly, he’ll settle for an oligopoly.” - The Myth of Capitalism (Book)
3. Cannibal stocks
Quality stocks which heavily buy back their own shares
When outstanding shares decrease, your stake in the company increases
“Pay close attention to the cannibals.” - Charlie Munger
Portfolio characteristics
Here’s what Our Portfolio looks like:
✅ The portfolio will invest worldwide (developed countries only)
✅ We’ll own 15-20 stocks
✅ The portfolio is aiming to invest in the best companies in the world
✅ We won’t trade a lot. Activity and costs harm our results
✅ We won’t try to time the market (I’m way too dumb for that)
✅ The characteristics of companies in the portfolio:
Sustainable competitive advantage
Great management with skin in the game
Healthy balance sheet
Low capital intensity
Good capital allocation
High profitability
Plenty of reinvestment opportunities
Trading at fair valuation levels
“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” - Warren Buffett.
Going forward we will use the strategies and characteristics mentioned above.
Why?
Because they have proven to be able to outperform the market:
Conclusion
That’s it for today.
Here’s what you should remember:
We’re partners on this journey. Your success is my success, and that’s why all my investable assets are in the companies I write about.
Compounding Quality is my life’s work. You deserve nothing less than my full commitment to keep learning and delivering value.
I’ll own my mistakes openly. I take full responsibility, and I’ll always communicate honestly when I get things wrong.
The strategy stays the same. We want to buy wonderful companies at a fair price.
The long term is the only thing that matters. We’re not chasing quick wins or yearly outperformance. We’re here to learn, compound, and reach financial independence together.
Talk to you soon!
Everything in life compounds
Team Compounding Quality
PS You are not a Partner of Compounding Quality yet? Discover everything you need to know here.
Book
Order your copy of The Art of Quality Investing here
Used sources
Interactive Brokers: Portfolio data and executing all transactions
Fiscal.ai: Financial data
I invest the savings from my daily hard work, so it is very important to me that this is not gambling. Thanks to CQ, I have gained a much stronger conviction that investing in quality stocks is the right approach.
I am especially grateful for the opportunity to rely on Pieter’s professional insights. The way he runs CQ reflects a very high level of quality and dedication. His experience, the meetings he is involved in, and the consistency of his analysis give me a great sense of trust and reassurance.
My strategy is therefore to follow CQ, as I simply don’t have the time or expertise to analyze such a wide range of stocks myself. Still, I feel involved because I understand the analyses and the feedback shared within the partnership. I am happy to contribute and be part of this from the beginning.
Even in the current challenging market conditions, this trust becomes even more valuable. Although my personal portfolio has not always matched the timing or allocation of CQ—and therefore has not yet outperformed the market—I remain confident. The quality of Pieter’s work and the long-term vision behind it give me a strong sense of calm and belief in the future.
I would also like to sincerely thank all partners for their many valuable contributions, and especially Pieter, who consistently provides very clear and easy-to-understand analyses of the market and our portfolio
If I could make one suggestion, it would only be from a position of appreciation: perhaps CQ could benefit from having more than one key lead investor over time—similar to the strength of partnerships like Munger and Buffett.
Thanxs to all the partners who contribute and especialy Pieter for his clear insights.
Hello, Pieter!
I greatly enjoyed reading your latest post. Your candor and humility are exactly what drew me to your Substack over three years ago.
Every now and then, I look back at those early posts, re-reading my favorite pieces along with our old comment exchanges. It’s incredible to see how much Compounding Quality has grown since then. You are truly living your dream, my friend, and it serves as a powerful lesson for all of us: take a simple idea, take it seriously, and stay the course. Plant a seed, water it, tend to it, and a beautiful flower will blossom in time.
Wishing you continued success and growth on the journey ahead!