Sunday, November 3, 2013

Quality Investing: Quantitative Endorsement

We likely share the qualitative view of what I call quality investing, but the below article helps us have some quantitative info. The top quartile companies ranked by profitability tend to remain in the first quartile 54% of the time.  28% of the time they slip to the second quartile, but very rarely those companies go to the laggards division. Thus mean reversion is likely to be against-the-odds investing. Try to search for "boring" companies: those are the best investments or what some call "compounders". Read the full article.

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