2. The Main Strategies That Work

Purpose

Teach the proven investing approaches that rely on discipline, valuation, and business understanding — not speculation or trading.

Core Principle

There are only a handful of strategies that consistently work long-term.
All involve owning quality businesses, thinking independently, and staying patient.

1. Quality Compounding

(Own great businesses for a very long time)

High-quality companies can compound for decades because they have:

• strong moats

• durable cash flow

• pricing power

• high returns on capital

• long reinvestment runways

This is the Buffett/Munger style:
Buy wonderful businesses at fair prices and let time do the work.

2. Value Investing

(Buy cash flows for less than they're worth)

Value investing is simply:

• estimating the intrinsic value of a business

• buying at a discount

• waiting for the market to recognize it

It relies on independent thinking and patience — not forecasting.

Classic examples: Graham, early Buffett, Klarman.

3. Growth + Innovation

(Own the companies creating the future)

Growth investing works when:

• the market is large

• the company is the category winner

• economics improve with scale

• competitive advantage increases over time

This includes technology leaders, innovators, and platform companies.

Peter Lynch’s principle: “Know what you own.”

4. Event-Driven Strategies

(Look for specific catalysts)

Examples:

• spin-offs

• restructurings

• mergers

• bankruptcies

• asset sales

• special situations

These require analytical depth and comfort with complex, temporary inefficiencies.

5. Thematic Investing

(Bet on long-term, secular trends)

Themes such as:

• aging demographics

• electrification

• cloud computing

• AI

• energy transitions

• cybersecurity

Thematic investing works only when the underlying economics support the thesis — not when it’s based on hype.

6. Portfolio Construction

(The discipline most investors skip)

Skill-based investing requires:

• diversification across industries

• position sizing

• knowing when to add

• knowing when to cut

• discipline during volatility

Portfolio construction turns ideas into a stable strategy.

7. Risk Management

(Protecting capital is the first job)

Key principles:

• avoid leverage

• avoid concentration in fragile ideas

• know your downside

• limit exposure to businesses you don’t fully understand

• use cash as flexibility, not timing

Risk management is the difference between staying in the game and blowing up.

Takeaway:

Skill-based public market investing is not about finding the next “winner.”
It’s about understanding businesses, valuing them intelligently, managing risk, and holding with discipline.