By Compounding Academy
Welcome to The Resilient Investor, a newsletter by Compounding Academy! With over five decades of combined experience, we’re here to provide you with insights to help make smarter stock choices and harness the power of compounding to grow your wealth. Explore the full range of resources on our website, including our Mindset SQUARED™ framework.
Each edition offers straightforward advice on stock picking and building a compounding portfolio—insider tips to help you invest confidently and build a prosperous future. Let’s get started!
After decades of investing professionally, we’ve refined our approach to focus exclusively on high quality, compounding businesses bought at reasonable prices. This disciplined philosophy has delivered strong returns by emphasizing simplicity, quality, and patience. By investing in companies with stable growth, strong fundamentals, and the ability to compound over time, we’ve developed a repeatable framework for consistent, long-term performance—and we’re here to help you do the same. Learn more about the Mindset SQUARED™ framework and explore our free resources for building your investing skills.
Chuck Akre’s investment approach is a powerful example of compounding at work, generating remarkable returns over time. Since 2010, Akre’s fund has delivered 831%, or 16% annually, compared to 431% (11.8% annually) for global equities. His focus on high-quality businesses with disciplined capital allocation mirrors our own philosophy.
To illustrate the effectiveness of our Mindset SQUARED™ approach, we backtested a list of 50 stocks that met our quality standards over the last 15 years (same timeframe as Chuck Akre). The results reveal how a focused selection of high-quality companies has delivered an extraordinary 18.2% annual return vs. global equities at 11.8%.
An additional analysis highlights that not only have returns been better, but this quality list has also demonstrated similar levels of risk compared to the benchmark. This balance of strong returns and controlled risk exemplifies our philosophy of achieving resilient growth. Join us to access exclusive insights, one-pagers, and risk-return profiles for quality companies.
Long-term compounding success requires the right mindset:
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“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” – Warren Buffett
Our framework centers on identifying high-quality companies with these key characteristics:
Examples include Fastenal, Visa, Assa Abloy, Autozone, ASML, and Rollins. Discover detailed profiles and one-pagers for these and other high-quality companies in our library.
Click Here For One Pager Library
Valuation discipline means not overpaying, no matter how great a company is. Inspired by Benjamin Graham’s “margin of safety” principle, we seek to buy high-quality stocks below their intrinsic value (underlying or true value), reducing the risk of permanent capital loss.
In practice, this approach minimizes risk and maximizes potential gains as the stock’s true value is realized over time.
The chart below illustrates how buying with a margin of safety can position you to benefit from price appreciation while limiting downside risk.
Our philosophy can be summarized simply: buy high-quality stocks at a reasonable price and hold them over the long term. This combination of quality, value, and the right mindset supports consistent, long-term growth.
In our next issue, we’ll kick off a miniseries exploring exactly what makes a quality company, starting with Predictable Revenue Growth—a critical foundation for resilient compounding. Take me to the next edition.