““Take a simple idea and take it seriously” ”
We invest in businesses we understand. They must have a long record of consistent cash flows and be run by people we want to work with. We buy them for a fair value.
This is a very simple idea. It is simple, but it is not easy.
We say “no” to a lot of solid companies. This is generally due to a lack of management continuity.
We have gone through long periods without a new acquisition; being picky leads to inactivity and our longest period was 5 years.
We miss out on deals even when everything is perfect due to not being the highest bidder. We have a rule on what we will pay for a business, and we do not break it. That leads to us missing out on deals.
We pass on lots of “shiny new objects” because they lack a long track record. Shiny new objects are fun! We say no.
It is the discipline of saying no to everything that does not fit our box that is difficult. Not coloring outside the lines. Staying focused. We have been reproached multiple times for not having the vision to understand something new. It is not that we do not understand it, it is simply not what we do. Focus on our checklist, patience, and discipline. This is what leads to long-term compounding results.