50 / 50 / 50 Framework
- Target:
- 50% Return on Equity
- 50% Margin
- 50% Growth
Strategy
- Strategy is to buy the Best Businesses in the World
- Target ‘Top of the Capital Stack’ Businesses that are an essential part of the value chain with Pricing Power
- High Competitive Moats and Barriers to Entry
- Superior Gross Margin vs Competition
- Superior Operating, EBITDA, Free Cash Flow and Net Income Margins vs Competition
- Monopoly or Duopoly Business
- Effective Capital Allocation, Stock Buy Backs, Dividends
- Target $1 billion to $500 billion market capitalization
- Selectively evaluate asymmetric risk/reward opportunities (10-1000x)
Company Analysis
- Predictable Earnings Profile of underlying business segments
- Organic Growth in a large market
- Long Runway
- Honest Management
- Focus on high return on equity, high return on tangible equity, high quality businesses with cash flow and dividends
- Capital allocation and reasonable valuation