• Permanent losses of capital emanate from purchase of low quality securities at times of favorable business conditions.
• A basket of Quality stocks generates superior investment returns compared to publicly traded benchmarks and does so with significantly lower risk.
• We believe market participants systematically underestimate the duration of competitive advantage of Quality businesses leading to superior subsequent investment performance.
• Existence of sustainable competitive advantage is a crucial component of a Quality business.
• A simple three factor model based on Return on Equity, Free Cash Flow, and Leverage generates superior returns with lower risk.

Investment Returns to Quality Developed Markets