Most of the noise in markets is about the next three months. Earnings beats, guidance tweaks, rate-cut odds. It's an endless stream of information that feels urgent and is almost always forgotten within a year.
The questions that actually determine outcomes are boring and slow. Is the business earning more on every incremental dollar than it did five years ago? Are customers stickier? Is the moat wider or narrower? You can't answer those from a quarterly headline.
What compounds
Returns on capital compound. Pricing power compounds. Culture compounds, sometimes positively, sometimes catastrophically. The companies I want to own are the ones where every year, almost invisibly, the economics get a little better.
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