Buy businesses at a discount to create a margin of safety, but then hold them for their growth potential. Resist the urge to sell based on price targets, as this creates a "false sense of precision" and can cause you to miss out on compounding.
The mental and emotional cost of owning a struggling, low-quality business often outweighs the perceived value of its cheap price. Paying a premium for a well-run, easier-to-hold company can yield better returns, both financially and in peace of mind.
Money, particularly inherited wealth, carries a significant emotional charge. Investment professionals have a profound responsibility for this intimate, human element. Focusing solely on returns neglects the crucial role of managing the feelings, history, and family dynamics attached to the capital.
Before any investment strategy, the choice of location is paramount. A stable country with strong property rights and rule of law provides the fundamental framework for wealth to compound across generations. Without this, even the best strategy can fail due to confiscation or conflict.
The act of a small committee deciding the "correct" cost of money is analogous to communist planners setting prices for consumer goods. This approach assumes an impossible level of knowledge and control over a complex economy, a model that has consistently failed throughout history.
Having lived through hyperinflation where money became a meaningless number, the real store of value is owning productive assets. A portfolio of quality businesses that provide real goods and services offers tangible protection that fiat currency cannot, as these businesses can adapt and reprice.
The ideal portfolio consists of high-quality businesses you can hold for years without constant monitoring. This strategy is best suited for managing "forgotten money"—capital that clients don't need short-term but cannot afford to lose, allowing for a truly long-term horizon.
Drawing from the biological principle that cells stop dividing to protect an organism's integrity, companies should moderate growth. Pushing beyond a sustainable rate (e.g., >20% annually) can introduce "mutations" like cultural drift, jeopardizing long-term survival for short-term scale.