Nick Sleep is one of the best investors you've never heard of.
People who invested with him achieved a yearly return of 20.8% (!).
Here are 7 essential investment lessons from Nick Sleep, together with all his shareholder letters mapped in 1 PDF 👇
People who invested with him achieved a yearly return of 20.8% (!).
Here are 7 essential investment lessons from Nick Sleep, together with all his shareholder letters mapped in 1 PDF 👇
1. Focus on the long term
The key to successful investing is to focus on the long term.
Look for companies with strong fundamentals and hold them for years, if not decades.
The key to successful investing is to focus on the long term.
Look for companies with strong fundamentals and hold them for years, if not decades.
2. Look for businesses with a competitive advantage:
A moat is essential for quality investors.
You can measure the moat by looking at a company's gross margin and ROIC.
A moat is essential for quality investors.
You can measure the moat by looking at a company's gross margin and ROIC.
3. Don't worry about short-term market fluctuations
Ignore short-term market fluctuations and focus on the long-term potential of a company.
Over time, the stock price will always follow the intrinsic value of the company.
Ignore short-term market fluctuations and focus on the long-term potential of a company.
Over time, the stock price will always follow the intrinsic value of the company.
4. Invest in companies with a high ROIC
Capital allocation is the most important task of management.
A high and consistent ROIC tells you the company is allocating capital efficiently.
Capital allocation is the most important task of management.
A high and consistent ROIC tells you the company is allocating capital efficiently.
5. Be patient
If you're patient, investment opportunities will come your way.
Successful investing requires patience and discipline.
If you're patient, investment opportunities will come your way.
Successful investing requires patience and discipline.
6. Keep an open mind
Investors should be willing to learn every single day.
Adapt if new information becomes available.
Investors should be willing to learn every single day.
Adapt if new information becomes available.
7. Focus on the quality of management
You want to invest in companies run by great people.
By investing in companies with skin in the game, you improve your chances to outperform the market.
You want to invest in companies run by great people.
By investing in companies with skin in the game, you improve your chances to outperform the market.
That's it for today.
Nick Sleep's annual letters are a must read.
You can grab them for free here:
qualitycompounding.substack.com
Nick Sleep's annual letters are a must read.
You can grab them for free here:
qualitycompounding.substack.com
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