White Papers

Our Approach to Stock Research

09.01.2011

Of all the first principles of good stock investing for the long term, owning companies with consistent earnings growth ranks highest in our view. Earnings growth underpins value and wealth creation. That growth, of course, is driven by the fundamentals of the business – durable strengths such as competitive advantage, barriers to entry, favorable long-term prospects, or preferably all of the above. Stock values, on the other hand, are a derivative of earnings. Sometimes stocks reflect a true picture of earnings potential and business fundamentals; often they do not.

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