The 8-Tier Framework for Identifying Elite Companies

Long_Equity
05-18 15:01

There are levels to quality investing.

Level 1: Profitability - e.g. $Coca-Cola(KO)$

Level 2: Strong band - e.g. Hermes

Level 3: Mission-critical product + high switching costs - e.g. $Microsoft(MSFT)$

Level 4: High returns on capital - e.g. $Fair Isaac(FICO)$ $Costco(COST)$

Level 5: Strong pricing power - e.g. $Apple(AAPL)$

Level 6: High barriers to entry - e.g. $Alphabet(GOOG)$ $Alphabet(GOOGL)$

Level 7: Network effects - e.g. $Visa(V)$ $MasterCard(MA)$ $Intercontinental Exchange(ICE)$


Level 8: Systemic infrastructure with no viable alternative

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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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