P/E compression acts like gravity pulling stocks downward, while earnings growth provides counteracting force.

The P/E expansion represents a powerful tailwind during bull markets but creates headwinds during subsequent periods when expansion stops.

A patient investor is in scientist mode — his position is a thesis and he is actively looking for all data. A stubborn investor is engulfed by his ego, not willing to change his mind, cherry-picking data to confirm his unshakable belief.

Companies that are run by owner-operators that have a high return on capital and a long growth runway.

We put in a small hedge (in accounts where we had option authorization) by buying puts on the S&P 500.

Think of it as a matrix. You have quality and valuation. Let’s say you have a very cheap, high-quality company — that’s a 5 to 7% position. Then you have low-quality and expensive, which would be on the opposite corner. It’s a spectrum.