Analytical Framework

This is my personal framework for thinking about public businesses. I tend to focus on companies with durable advantages, strong economics, rational capital allocation, and a long runway for reinvestment.

I am less interested in predicting the next 12 months and more interested in understanding what conditions would allow a business to compound over many years.

What I Look For

• Durable advantage: a moat grounded in switching costs, network effects, scale, data, standards, or embedded distribution.
• Strong unit economics: high incremental returns without excessive capital required just to maintain position.
• Reinvestment runway: credible ways to deploy earnings at attractive rates over time.
• Owner-oriented management: sensible incentives, rational capital allocation, and long-term decision-making.
• Business clarity: a plain-language understanding of why the business wins and what could break the thesis.

How I Make Decisions

• Business first, price second: price affects expected return, but business quality determines whether I want to keep studying the company.
• Position size should follow understanding: larger positions require greater clarity about the business, valuation, risks, and downside.
• Base rates matter: few businesses compound for decades, so I try to separate durable economics from temporary performance.
• Capital allocation is often the hidden lever: reinvestment, buybacks, acquisitions, and balance-sheet decisions can materially affect long-term results.

What I Avoid

• Businesses that require heavy capital simply to maintain their position.
• Growth that depends primarily on easy financing, promotional sentiment, or aggressive assumptions.
• Complex situations where I cannot explain the edge or the downside in plain language.
• Short-term macro predictions disguised as company-specific fundamentals.

Temperament & Risk

I view volatility as different from permanent impairment. The risks I care about most are business deterioration, poor capital allocation, excessive leverage, and paying a price that leaves little room for future returns. My bias is toward fewer decisions, clearer reasoning, and longer evaluation periods.

Important Note

This framework is a description of how I think about my own public-market investing. It is not investment advice, a recommendation, or a process anyone else should rely on. I may own securities discussed in the essays linked on this site.