Defense-in-Depth

Geoff Gannon from Focused Compounding has highlighted these to be his defense-in-depth approach when it comes to evaluating a potential investment: Price: 2/3 or less than the average company in that industryIndustry: better than most industriesManagement: better than most management teamsPosition in the industry: better company and above average in this industry Some industries included in the discussion were: Advertising AgenciesBanks The best companies Geoff had found were what he called poorly-run business in an above-average industry.

Near-Death Experiences

“What doesn’t kill you makes you stronger.”Friedrich Nietzsche “And if at first you don’t succeed,Dust yourself off and try again,You can dust it off and try again.”Try Again by Aaliyah featuring Timbaland Another useful mental model that I’ve put into my investing toolbox, is looking for products/businesses that have survived near-death experiences.