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Spotting an economic moat in a business before the fact is not an easy thing to do. Here are seven signs to start off from.

The term economic moat has become widely familiar in the investing world. It refers to a business’s ability to maintain competitive advantages over its competitors in order to generate excellent returns on invested capital.

The key word here lies in maintain. An economic moat is not simply a competitive advantage that currently allows a company to earn excess returns over its competitors and cost of capital. It’s one that is expected to last, continuously fending off attacks to the economic castle.

In our previous note about return on invested capital (ROIC), we did a comprehensive walkthrough of how to properly…


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Ever since its publication in 1949, The Intelligent Investor has widely been considered the stock market bible.

Not only were readers of the book blessed with a thick book written from arguably the greatest financial minds of the time. They were blessed with the fact that Graham wrote the words directly to the layman.

Of course, The Intelligent Investor is destined to be in the Junto book notes. After all, the lessons that Ben Graham puts forth are the epitome of what Junto is all about.

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This is the fifth or sixth time I have blazed through The Intelligent…


Return on Invested Capital: The Complete Lesson to Calculating It Right

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Clayton Christensen, who sadly passed away in January last year, pioneered the fields of management and innovation.

His book, The Innovator’s Dilemma, was called one of the six most important business books ever written by The Economist. Andy Grove, then the chief executive of Intel, said a year after its publication that it was the most important book he had read in 10 years. In 2011, Forbes called Clayton one of the most influential business theorists of the last 50 years.

Now, why is Clayton Christensen important for our…


Junto turns 1 year old. This is the first annual letter on top of a peculiar year of 2020.

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In five days, Junto Investments will turn one year old.

I think it’s safe to say that the first year of the venture did not turn out as expected. But what could anyone really expect?

One of the main lessons of 2020 is one that everyone seems to get reminded of pretty much every year. But this time it was especially evident: that attempting to forecast the market is a fool’s errand. Not a single market forecast in the world included…


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The small choices we make every day matter much more in the long run than we tend to think.

Albert Camus famously said: Life is the sum of all your choices. It’s true. And every single one of those little choices might have a bigger impact down the line than one might initially think.

This is the key point of James Clear’s book, Atomic Habits. Clear talks about the long game and how every little choice affects the compounding of the path to one’s desired goals. Just like atoms are fundamental units of larger systems, habits are basically the atoms of our lives. …


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Enormous power comes with attention and focus. But sometimes when we try too hard, it can backfire. We excel the most when our focus is unconsciously immersed in what we set out to do: when we play The Inner Game.

Straight out of Harvard in 1971, Timothy Gallwey was working as a tennis coach. Having captained the tennis team at the university, he was on sabbatical before starting a career job.

One day, when he left the court briefly after a student training session, one of his students, who struggled with a technical problem, had remarkably improved his game by the time he returned. Gallwey observed that the student had taught himself to overcome the issue after the training session.

That’s when Gallwey realized his new way of coaching. He quickly discovered that students would perform worse when he gave…


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There are those who rush through things and there are those who are deliberate about what they’re creating. Let’s call the first group get-rich-quick entrepreneurs and the second group deliberate entrepreneurs.

The problem is that it’s the rushing through things that makes end goals seem ever eluding. No matter how fast one is running, it never seems to work. It’s the second group that makes lasting work that’s much more like to succeed. Work that one can be proud of.

Being deliberate means doing something carefully and unhurried. …


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FactSet is a nimble and simple business.

There’s really not much to not like about the company — except that I don’t use their services myself. So I surely have a handicap in making an assessment of the business in that regard.

This is a bit of a lengthy piece on a company analysis. I knew very little about FactSet before I sat down to study the business. But I very much enjoyed learning about it. …


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It’s a remarkable thing that one of society’s most useful inventions is still the humble checklist. It’s remarkable because humans generally are really terrible at following procedures. We get bored. A computer, on the other hand, is really good at following procedures. That is pretty much all a computer ever does. And their rate of error is much lower than humans.

In an increasingly complex world with specialization in every corner of society, we have gotten used to divide problems up into pieces. Therefore, we all pretty much agree that checklists are a very necessary tool in the world. Airliners…


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While mental models help us comprehend, principles guide our behavior. Fundamentally, they act as the core operating system behind our decision making.

As Ray Dalio writes in Principles:

Every day, each of us is faced with a blizzard of situations we must respond to. Without principles we would be forced to react to all the things life throws at us individually, as if we were experiencing each of them for the first time. If instead we classify these situations into types and have good principles for dealing with them, we will make better decisions more quickly and have better lives…

Oliver Sung

I invest and write about it at Junto Investments.

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