The Intellectual
Investor’s
Lexicon
By Vitaliy Katsenelson
Q
Quality (as a spectrum of light)
I think of quality as a spectrum of light: black and white and color. Black and white are the fundamentals — the essential craftsmanship. In research, it’s building financial models where we stress test every assumption. The color is more elusive — where art lives.
Quality (Buffett’s test)
I like Warren Buffett’s definition of quality: if the stock market was closed for ten years, would I be comfortable holding this stock?
Quality as Multiplicative
Quality is multiplicative, not additive. Like multiplying numbers, one zero brings the whole product to zero. One poor surface can undermine everything.
