txfan2424

bumping this

I am surprised no one mentioned IILG. That is most interesting to me.

I wanted to get this thread firing again b/c it is interesting. I think I disagree with how some of you have defined quality - mostly via the company examples I saw. Quality, to be sure, does not always make the best investment so this is a fun chat. For example, someone suggested P&G and PEP were quality, while CAT and MTW are not. My question is how you are defining quailty in a business? What makes a good business? Does growth make something a good business? Absolutely not. Any company can grow if management puts their minds to it. High market share? Maybe. Perhaps high market share isn't necessarily a good thing. Particularly when the world around you is changing. High market share can mean high costs to exit a business line. Lets go back to the examples of CAT and MTW. Both are leaders in their industry. Is construction going away? The world of contruction will be lumpy as far in the future as it has been in the past. Lumpiness doesn't mean a bad business at all though. Both companies are able to manage their business to maximize cash flow in down times and offer high quality products for the cheapest cost of ownership in the industry. That is pretty good. Each of their aggregate spend on R&D and far reaching aftermarket reach makes it unlikely (or, expensive at the very least) for someone to try and unseat them. Someone would have to be willing to accept uneconomic returns for a very long time. Just a couple of my ruminations on quality.