{"product_id":"on-the-hunt-for-great-companies-isbn-9781394285747","title":"On the Hunt for Great Companies","description":"\u003cp\u003e\u003cb\u003eEssential guide for detailed evaluation of business quality aimed at investors in both public and private markets\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eA practical tool for investment analysis, \u003ci\u003eOn the Hunt for Great Companies: An Investor's Guide to Evaluating Business Quality and Durability\u003c\/i\u003e helps readers analyze target companies in relation to 17 traits of business quality, as well as the nuances within them.\u003c\/p\u003e \u003cp\u003eReaders will learn how to empirically evaluate the traits of a good business, including passionate management, staying power, abnormal reinvestment options, low dependency risk, and to identify emerging quality. \u003c\/p\u003e \u003cp\u003eThis book is supported by a wealth of real-world examples, both contemporary and historical, detailed original illustrations, and true business stories and anecdotes from investor and former comedian Simon Kold. In this book, readers will learn about:\u003c\/p\u003e \u003cul\u003e \u003cli\u003ePractical guidelines for research into 17 nuances of business quality\u003c\/li\u003e \u003cli\u003eMethods to formulate falsifiable test statements and empirically test those predictions, rather than relying on heuristics or box-checking\u003c\/li\u003e \u003cli\u003eIncorporates memorable investment advice through Kold’s trademark humorous style\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eDetailed, sophisticated, and highly actionable,\u003ci\u003e \u003c\/i\u003e\u003ci\u003eOn the Hunt for Great Companies\u003c\/i\u003e is an essential for professional investors of all sizes, in all industries, in both public and private markets.\u003c\/p\u003e \u003cp\u003eAcknowledgments xiii\u003c\/p\u003e \u003cp\u003eList of Figures xv\u003c\/p\u003e \u003cp\u003eList of Tables xix\u003c\/p\u003e \u003cp\u003eList of “Let’s Sniff Around” xxi\u003c\/p\u003e \u003cp\u003eIntroduction 1\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart I What Makes Some People Create Exceptional Long- term Per-share Business Performance? 7\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1 Passion 9\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e1.1 Perseverance and Internal Motivations 11\u003c\/p\u003e \u003cp\u003e1.2 Focus on All Stakeholder Constituencies 14\u003c\/p\u003e \u003cp\u003e1.3 Decision- making Time Horizons 17\u003c\/p\u003e \u003cp\u003e1.4 Career Path and Tenure 18\u003c\/p\u003e \u003cp\u003e1.5 Retention of People 23\u003c\/p\u003e \u003cp\u003e1.6 Authenticity Indicates Passion 25\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2 Long- term Incentives 35\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e2.1 Board of Directors 38\u003c\/p\u003e \u003cp\u003e2.2 Disincentives 40\u003c\/p\u003e \u003cp\u003e2.3 Transactions in Own Shares 42\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3 Capital Allocation 45\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e3.1 Value- accretive Buybacks versus Buybacks 47\u003c\/p\u003e \u003cp\u003e3.2 Hurdle Rates Should Be Determined by Alternatives 50\u003c\/p\u003e \u003cp\u003e3.3 Value Destructive Acquisitions 52\u003c\/p\u003e \u003cp\u003e3.4 Unsung Capital Allocators 53\u003c\/p\u003e \u003cp\u003e3.5 Metrics and Vocabulary 54\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4 Reliable Communication 57\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e4.1 Past Predictions and Ex Post Outcomes 59\u003c\/p\u003e \u003cp\u003e4.2 Genuineness as Indicator of Reliability 61\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart II What Makes Competitive Advantages Intense and Durable? 65\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5 Economies of Scale 73\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e5.1 Relative Scale and Relevant Market 75\u003c\/p\u003e \u003cp\u003e5.2 Prohibitive Costs 76\u003c\/p\u003e \u003cp\u003e5.3 Evaluating the Intensity and Durability of Economies of Scale Advantages 77\u003c\/p\u003e \u003cp\u003e5.3.1 General analyses 77\u003c\/p\u003e \u003cp\u003e5.3.2 Distribution network density 84\u003c\/p\u003e \u003cp\u003e5.3.3 Purchasing scale advantages 86\u003c\/p\u003e \u003cp\u003e5.3.4 Marketing scale advantages 88\u003c\/p\u003e \u003cp\u003e5.3.5 Production scale advantages 89\u003c\/p\u003e \u003cp\u003e5.3.6 Related concepts 90\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6 Switching Costs 93\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e6.1 Sticky Customers, Add- on Products, and “Cost of Switching” 95\u003c\/p\u003e \u003cp\u003e6.2 Switching Cost Multipliers 97\u003c\/p\u003e \u003cp\u003e6.3 Evaluating Intensity of Switching Cost Advantages 98\u003c\/p\u003e \u003cp\u003e6.3.1 Costs of switching 98\u003c\/p\u003e \u003cp\u003e6.3.2 The arbitrage of switching costs 100\u003c\/p\u003e \u003cp\u003e6.3.3 Churn, retention, and cohorts 101\u003c\/p\u003e \u003cp\u003e6.3.4 Risk of standardization 104\u003c\/p\u003e \u003cp\u003e6.3.5 Risk of excessive value extraction 106\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7 Network Effects 107\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e7.1 Boundedness 110\u003c\/p\u003e \u003cp\u003e7.2 Critical Mass and Relative Scale 110\u003c\/p\u003e \u003cp\u003e7.3 Evaluating the Intensity and Durability of Network Effect Advantages 111\u003c\/p\u003e \u003cp\u003e7.3.1 General analyses 111\u003c\/p\u003e \u003cp\u003e7.3.2 Protocol network effects 122\u003c\/p\u003e \u003cp\u003e7.3.3 Expertise ecosystem network effects 125\u003c\/p\u003e \u003cp\u003e7.3.4 Two- sided networks 128\u003c\/p\u003e \u003cp\u003e7.3.5 Data network effects 132\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8 Brand Advantages 135\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e8.1 “Identity Creating” or “Uncertainty Reducing” 138\u003c\/p\u003e \u003cp\u003e8.2 Brand Time Constraints 140\u003c\/p\u003e \u003cp\u003e8.3 Luxury Brands 141\u003c\/p\u003e \u003cp\u003e8.4 Evaluating Brand Advantages 142\u003c\/p\u003e \u003cp\u003e8.4.1 Brand benefits 142\u003c\/p\u003e \u003cp\u003e8.4.2 The Lindy effect and brand longevity 143\u003c\/p\u003e \u003cp\u003e8.4.3 Geographical boundedness 144\u003c\/p\u003e \u003cp\u003e8.4.4 Analytical risk of over- interpreting brand loyalty data 145\u003c\/p\u003e \u003cp\u003e8.4.5 Counterfeiting risk 146\u003c\/p\u003e \u003cp\u003e8.4.6 Brand experience control risk 146\u003c\/p\u003e \u003cp\u003e8.4.7 Brand dilution risk 146\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9 Proprietary Resources 149\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e9.1 Favorable Access to Raw Materials 150\u003c\/p\u003e \u003cp\u003e9.1.1 Locking up favorable sources 151\u003c\/p\u003e \u003cp\u003e9.2 Proprietary Technology 152\u003c\/p\u003e \u003cp\u003e9.3 Favorable Locations 154\u003c\/p\u003e \u003cp\u003e9.4 Favorable Government Treatment 157\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart III What Makes Some Companies Less Risky and More Valuable Than Others? 161\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10 Fair Value Extraction 163\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e10.1 Tapped and Untapped Pricing Power 165\u003c\/p\u003e \u003cp\u003e10.2 Lack of Value Capture 169\u003c\/p\u003e \u003cp\u003e10.3 Determinants of Choosing to Withhold Value Extraction 169\u003c\/p\u003e \u003cp\u003e10.4 Risk of Extracting Excessive Value from the Supply Side 170\u003c\/p\u003e \u003cp\u003e10.5 Evaluating the Risk of Excessive Value Extraction 171\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11 Staying Power 175\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e11.1 The Pace of Technological Change in the Industry 178\u003c\/p\u003e \u003cp\u003e11.2 Exposure to External Foundational Technological Shifts 181\u003c\/p\u003e \u003cp\u003e11.3 Cultural Embeddedness 183\u003c\/p\u003e \u003cp\u003e11.4 Cost- effectiveness 184\u003c\/p\u003e \u003cp\u003e11.5 Demographic Exposures 185\u003c\/p\u003e \u003cp\u003e11.6 Exposure to Industry Channel Changes 185\u003c\/p\u003e \u003cp\u003e11.7 Age of Technology\/Product Category 186\u003c\/p\u003e \u003cp\u003e11.8 Staying Power Versus Growth 187\u003c\/p\u003e \u003cp\u003e11.9 Evaluating Staying Power 187\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 12 Proven Business Model 191\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e12.1 Geographical Replicability 197\u003c\/p\u003e \u003cp\u003e12.2 Expansion Investments 199\u003c\/p\u003e \u003cp\u003e12.3 Lifetime Unit Economics 201\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 13 Predictable Demand Drivers 205\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e13.1 Line of Sight of Revenues 208\u003c\/p\u003e \u003cp\u003e13.1.1 Backlog of orders 209\u003c\/p\u003e \u003cp\u003e13.1.2 Upgrade cycles and replacement sales 209\u003c\/p\u003e \u003cp\u003e13.1.3 Contractual recurring business 210\u003c\/p\u003e \u003cp\u003e13.1.4 Aftermarket services and spare parts 212\u003c\/p\u003e \u003cp\u003e13.2 Predictability of Longer- term Industry Demand 213\u003c\/p\u003e \u003cp\u003e13.2.1 Determinants of predictability beyond line of sight 213\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 14 Reinvestment Options 217\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e14.1 Product Line Expansion 220\u003c\/p\u003e \u003cp\u003e14.2 Territorial Expansion 222\u003c\/p\u003e \u003cp\u003e14.3 Increased Capacity 223\u003c\/p\u003e \u003cp\u003e14.4 Customer Acquisitions and Brand Building Investments 225\u003c\/p\u003e \u003cp\u003e14.5 Buying Other Companies 226\u003c\/p\u003e \u003cp\u003e14.5.1 Consolidations of fragmented industries 226\u003c\/p\u003e \u003cp\u003e14.5.2 Cross- selling with switching cost multipliers 227\u003c\/p\u003e \u003cp\u003e14.5.3 Acquihires 228\u003c\/p\u003e \u003cp\u003e14.6 Lack of Reinvestment Options 230\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 15 Scalability and Low Incremental Costs 231\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e15.1 Determinants of Marginal Cost 233\u003c\/p\u003e \u003cp\u003e15.2 High Break- even Point 235\u003c\/p\u003e \u003cp\u003e15.3 Scalability of Infrastructure 236\u003c\/p\u003e \u003cp\u003e15.4 Operational Leverage Magnifies Cyclical Risks and Exit Costs 238\u003c\/p\u003e \u003cp\u003e15.5 Capital- light Versus Capital- intensive Businesses 239\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 16 Cyclical Risks 241\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e16.1 Cyclical Company: Good or Bad? 243\u003c\/p\u003e \u003cp\u003e16.2 Degree of Cyclicality 244\u003c\/p\u003e \u003cp\u003e16.2.1 Historical cyclicality 246\u003c\/p\u003e \u003cp\u003e16.2.2 Historical managerial behavior 247\u003c\/p\u003e \u003cp\u003e16.3 Minimizing Analytical Risks Caused by Cyclicality 248\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 17 Other Risks 255\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e17.1 Dependency Risks 256\u003c\/p\u003e \u003cp\u003e17.2 Diversity of Income Streams: Risks and Benefits 257\u003c\/p\u003e \u003cp\u003e17.3 Leverage Risks 261\u003c\/p\u003e \u003cp\u003e17.4 Geopolitical Risks 264\u003c\/p\u003e \u003cp\u003e17.5 Regulatory Risks 265\u003c\/p\u003e \u003cp\u003e17.6 “Unknown” Risks 267\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 18 Final Remarks 271\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e18.1 Analytical Errors 273\u003c\/p\u003e \u003cp\u003e18.2 Price Matters 275\u003c\/p\u003e \u003cp\u003e18.3 Predicting Quality 276\u003c\/p\u003e \u003cp\u003eAppendix: Banana Peels of Inductive Logic 281\u003c\/p\u003e \u003cp\u003ePrediction Based on Past Experience 281\u003c\/p\u003e \u003cp\u003eArgument from Cause 282\u003c\/p\u003e \u003cp\u003eArgument from Generalization 283\u003c\/p\u003e \u003cp\u003eArgument from Analogy 284\u003c\/p\u003e \u003cp\u003eArgument from Authority 285\u003c\/p\u003e \u003cp\u003eAnecdotal Argument 286\u003c\/p\u003e \u003cp\u003eAbout the Author 289\u003c\/p\u003e \u003cp\u003eNotes 291\u003c\/p\u003e \u003cp\u003eList of Companies Profiled 301\u003c\/p\u003e \u003cp\u003eIndex 303\u003c\/p\u003e  \u003cp\u003e\u003cb\u003eSIMON KOLD\u003c\/b\u003e is the founder of Kold Investments, a Copenhagen-based investment firm. He was previously at Novo Holdings, one of the world’s largest investment organizations, with assets worth €149 billion. He is one of the few fund managers who also has a degree in theology and had a stint in stand-up comedy.   \u003c\/p\u003e\u003cp\u003eMany investment books discuss the characteristics of great businesses, but in a way that provides broad theoretical overviews without actionable tools for implementation. \u003ci\u003eOn the Hunt for Great Companies: An Investor’s Guide to Evaluating Business Quality and Durability\u003c\/i\u003e offers actionable frameworks for practical implementation of sophisticated empirical analysis of all the essential traits of a good business, such as passionate management, staying power, abnormal reinvestment options, and low dependency risk, just to name a few. \u003c\/p\u003e\u003cp\u003eThis book stands out by offering detailed guides on measuring the intensity and durability of these traits, making it an essential handbook for advanced investment research. Investor Simon Kold provides practical guides on how to empirically assess various characteristics that make businesses strong candidates for long-term investment, as well as the nuances within each characteristic. \u003c\/p\u003e\u003cp\u003eWith 18 chapters, each covering a characteristic of great businesses, this book provides readers with: \u003c\/p\u003e\u003cul\u003e\n\u003cli\u003eComprehensive conceptual explanations supported by real-world examples, true business stories, and personal anecdotes\u003c\/li\u003e\n\u003cli\u003eExamples of the author demonstrating the proposed analyses and original illustrations to elucidate key concepts\u003c\/li\u003e\n\u003cli\u003eGuides for obtaining relevant information in practice for conducting the proposed tests of each quality trait\u003c\/li\u003e\n\u003c\/ul\u003e \u003cp\u003eAlthough the book deals with the quality of companies, it is by no means limited only to the phenomenon of ‘quality investing’ which focuses on mature companies with pronounced overall quality. Rather, the foundation of this book is that investors should formulate falsifiable test statements, then empirically test those predictions, regardless of which company they are assessing. \u003c\/p\u003e\u003cp\u003e\u003ci\u003eOn the Hunt for Great Companies: An Investor’s Guide to Evaluating Business Quality and Durability\u003c\/i\u003e is essential for investors in all industries, in both public and private markets, and for investors who buy anywhere from one share to all of the shares of the companies in which they invest.   \u003c\/p\u003e\u003cp\u003e\u003cb\u003ePraise for\u003cbr\u003eON THE HUNT \u003csmall\u003eFOR\u003c\/small\u003e GREAT COMPANIES\u003c\/b\u003e \u003c\/p\u003e\u003cp\u003e“Kold provides an excellent framework to help investors navigate the treacherous path toward investment success. This book will help both sophisticated professional investors and beginners achieve their investment objectives.”\u003cbr\u003e \u003cb\u003e— Brian C. Rogers,\u003c\/b\u003e Retired Chairman and CIO of T. Rowe Price \u003c\/p\u003e\u003cp\u003e“Long-term fundamental value investing in high-quality companies is the best way to generate consistent returns. Simon Kold has the track record to shed light on the key elements of this strategy.”\u003cbr\u003e \u003cb\u003e—Kasim Kutay,\u003c\/b\u003e CEO of Novo Holdings \u003c\/p\u003e\u003cp\u003e“I’ve read (and written) my fair share of dry, technical tomes on finance. \u003ci\u003eOn the Hunt for Great Companies \u003c\/i\u003eis an inspiring, very practical and wonderfully written book on identifying ‘alpha return’ companies.”\u003cbr\u003e \u003cb\u003e— Thomas Plenborg,\u003c\/b\u003e Professor at Copenhagen Business School and Chairman of DSV  \u003c\/p\u003e\u003cp\u003e\"Simon Kold is a clear and rational thinker in the mold of Charlie Munger. And he has a clear grasp of the many fallacies of thinking that are rife in the investment world. Armed with these, he dives deep into the critical factors that define business quality. Unlike my book - which addresses the inner game of investing, Kold's book carefully examines all the factors that contribute to business quality. Any reader will come away with a better set of mental frameworks to use in searching for and evaluating business quality.\u003cbr\u003eKold's book is a must read for all serious investors and will certainly take its place alongside other greats - especially other practically oriented books - like the Outsiders by Thorndike and Margin of Safety by Seth Klarman.\"\u003cbr\u003e\u003cb\u003e\u003ci\u003e—\u003c\/i\u003eGuy Spier, author of \u003ci\u003eThe Education of a Value Investor\u003c\/i\u003e\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e­“Kold provides an excellent framework to help investors navigate the treacherous path toward investment success. This book will help both sophisticated professional investors and beginners achieve their investment objectives.”\u003cbr\u003e\u003cb\u003e\u003ci\u003e—\u003c\/i\u003eBrian C. Rogers, Retired Chairman and CIO of T. Rowe Price\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e“Long-term fundamental value investing in high quality companies is the best way to generate consistent returns. Simon Kold has the track record to shed light on the key elements of this strategy.”\u003cbr\u003e\u003cb\u003e\u003ci\u003e—\u003c\/i\u003eKasim Kutay, CEO of Novo Holdings\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\"Having personally worked with Simon Kold, I can attest to his investment acumen and the analytical rigor displayed in this sophisticated yet entertaining investment book.\"\u003cbr\u003e\u003cb\u003e\u003ci\u003e—\u003c\/i\u003eBjarne Graven Larsen, Founder of Qblue Balanced and former CIO of ATP and Ontario Teachers' Pension Plan\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e “I’ve read (and written) my fair share of dry, technical tomes on finance. ‘On the Hunt for Great Companies’ is an inspiring, very practical and wonderful written book on identifying ‘alpha return’ companies.”\u003cbr\u003e\u003cb\u003e\u003ci\u003e—\u003c\/i\u003eThomas Plenborg, Professor at Copenhagen Business School \u0026amp; Chairman of DSV\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e \"On the Hunt for Great Companies is not only a thoughprovoking and refreshing take on the arduous journey of the true value investor, it is a reflection of what I have seen Simon Kold practice throughout the years I’ve known him.\"\u003cbr\u003e\u003cb\u003e\u003ci\u003e—\u003c\/i\u003eSalah Saabneh, Partner at Manikay Partners and former Chairman of Tel Aviv Stock Exchange\u003c\/b\u003e\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47989714190565,"sku":"NP9781394285747","price":45.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781394285747.jpg?v=1761785215","url":"https:\/\/k12savings.com\/es\/products\/on-the-hunt-for-great-companies-isbn-9781394285747","provider":"K12savings","version":"1.0","type":"link"}