5 Wide Moat Businesses 🏰

[ATC (Absolute Total Compound)]

The Buffett-Munger Profitability_And_Assets_Productivity_Investing Truism Dharma 168:

CompROA Ratio and FPR

i.

CompROA Ratio (Competitive Return On Asset Ratio, by ATC)

= ∛(Revenue × Gross Profit × Net Profit) ÷ Total Assets

FPR (Finance Pressure Ratio, by ATC)

= Total Assets ÷ ∛(Revenue × Gross Profit × Net Profit)

= Inverse of CompROA

= 1 ÷ CompROA

ii.

If CompROA Ratio ≤ 0.2109 or FPR ≥ 4.743

= It implies Weak Competitive Advantage with Weak Profitability & High Finance Pressure

= Not a Compounder

iii.

If CompROA Ratio ≥ 0.4217 or FPR ≤ 2.371

= It implies Strong Competitive Advantage with Strong Profitability & Low Finance Pressure

= Poised to be a Multi-bagger Compounder, the magnitude depends on the synergy between the ROIC & Gnp

= Having a long compounding runway time horizon

Reference:

Profitability_And_Assets_Productivity_Investing Truism Dharma 162

[The Dutch Investors]

The question remains if these can outperform over the next decade… people recognize value, and this is usually already priced in.