In the short run companies are valued off narratives. In the long run companies are valued off cash flow.

Here some example of stocks making that painful transition from narrative to cash flow.

We start off with Peloton $PTON. The story behind it is it was revolutionizing the entire gym and health experience. A peak of $157, now trades at $10. Next up, Teladoc $TDOC. This was the company that would revolutionize healthcare by making it so you no longer had to visit the doctor. Went from $290 to now $11.

The term "compounder" is thrown around a lot. But what does it mean?

I learned from the investing philosophies of Buffett, Munger, and others to boil down what I believe is the best overview of what a Compounding Machine actually is, and how to invest in them.

These 8 slides go over my Investing Philosophy Compounders are highly predictable money making machines. They are defined by their many attractive attributes and lack of unattractive attributes

Costco reports earnings today. Here are a few fun facts about Costco.

Costco has grown revenue by about 10% per year for the last 30 years. They are a volume business, they care about top-line growth, not margins. Costco will never put its employees, customers, or shareholders, at risk. For over 20 years they have had more cash than debt and capital leases. Their growth has been without using financial leverage.

I put together the "Compounder Checklist" as a guideline for my investments. A compounder is a high-quality durable company that's profitable through every part of the economic cycle and difficult to disrupt.

Let me go through the research for each point. First: Why focus on compounders?

“Our research shows that these ‘compounders,’ ...have generated superior risk-adjusted returns across the economic cycle”. Simply put the reason I focus on compounders is because they have better long term returns.