What are your Investment Rules?

[kiora]

"How to identify consistent compounders"

https://www.livewiremarkets.com/wire...%20COMPOUNDERS
Consistent compounders are businesses that are out to deliver persistent earnings and revenue growth over long periods of time. They are not exposed to underlying economic or commodity price cycles. At their core, they are the ASX's most consistent long-term growth stocks."
"Your odds of long-term investment success are far higher if you focus on businesses that have proven their capacity to consistently grow their earnings over time."
"These are businesses that are price makers, not price takers, and typically they aren't as exposed, or not exposed at all, to the underlying economic cycles. Certainly, they're not exposed to things beyond management's control, for example, commodity prices."
"It's a high-quality business with a dominant market position, typically they're able to set their own prices to a degree without the influence of global financial markets"
"If these stocks outperform over the long term, why would people invest in anything else?"
" people often try and overcomplicate investing."
"from a total return standpoint, the chances of success are higher if you're focused on businesses that can deliver compounded and persistent growth'
"Common factors in defining these quality compounders are things like return on equity or return on invested capital,grow those margins over time,consistently deliver earnings throughout the cycle and a line of sight on future growth opportunities"
"balance sheet strength and a stable balance sheet are important."
"management is very important, and things like governance and having internal rules around payout ratios, buybacks and capital management decisions"

"no commodities, resources, or materials companies would be consistent compounders?"

"The same goes for the banks as well. Banks are very much dependent on the economic cycle."

"look at the balance sheets of businesses in the tech space, for instance, or the healthcare space, these are typically happy hunting grounds for compounders. And again, it goes back to what I was speaking about earlier. They provide a service or a product that people are increasingly dependent on."
"these sectors are shielded against the broader economic cycle, and they're operating a system or delivering a product that isn't easily replicated by competitors."

"we are more "buy and hold" investors. Certainly, if the conditions are right, these are businesses that we see no reason for investors to be buying and selling them. You let the compounding do its job. Over time, the share price should follow the compounded earnings higher."

" if multiples are constant, then it makes a lot of sense if earnings and dividends are growing over time, then the share price should mathematically (at least) be higher as well"