11. It’s Still About Price and Quality

I sometimes think investing is a slow, step-by-step, career-long process of experiencing all the things that can go wrong. You discover hidden liabilities in your investment. The company’s products inexplicably start losing market share. A CEO quits or has to be replaced, and then the new CEO turns out to be no better. The economy retreats and revenue collapses, causing your high-fixed-cost companies to start bleeding cash and sending management and shareholders into a panic. Such reversals always bring to mind the counsel that elder surgeons give to anxious medical students: “Relax. All bleeding stops eventually.”

There is something inherently punitive about the process of improving as an investor. Understanding ...

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