In terms of percentages, the high-quality compounder category likely will have fewer errors—that is, fewer permanent capital losses—than the “statistically cheap” securities category. This doesn’t mean one will do better than the other, as a higher winning percentage doesn’t necessarily mean higher returns. But if you want to reduce “unforced errors,” or losing investments, it is more beneficial to focus on high-quality businesses. As an investor, life feels so pleasant when you are invested in high-quality compounders.
