BOOK REVIEW- The Art of Quality Investing: How to Invest in the Best Companies in the World by Luc Kroeze (aka Compounding Quality)
Build Wealth by Owning World-Class Companies at Fair Prices
— by Luc Kroeze (Compounding Quality)
1. The Philosophy: What Is Quality Investing?
Luc Kroeze teaches that quality investing isn’t about chasing cheap stocks. It’s about buying exceptional companies with:
• Long-term advantages (moats)
• Strong leadership
• Healthy financials
• Global reach
“Don’t just buy what’s cheap. Own what lasts.”
Like Warren Buffett, the author believes it’s better to buy a great company at a fair price than a fair company at a great price.
2. Qualitative Checklist: What Makes a Company Truly Great?
Luc provides a practical quality checklist every investor should use:
• ✅ Simple and understandable business model
• ✅ Global or diversified customer base
• ✅ Strong pricing power and market dominance
• ✅ Sustainable growth & resilience in crises
• ✅ Skilled, ethical leadership (skin in the game)
✔️ If you can’t explain what the company does in 60 seconds, don’t invest.
3. Quantitative Filters: Numbers That Matter
A great company must also prove itself with numbers:
• Consistent growth in revenue and earnings
• High ROIC (Return on Invested Capital)
• Strong free cash flow
• Low debt and a healthy balance sheet
• Reasonable valuation (not overpriced)
These metrics show if a company can sustainably grow and reward shareholders.
️ 4. Portfolio Construction: Build with Purpose
Luc advises building a concentrated portfolio of 15–20 top-tier businesses, diversified across sectors. His approach:
• Focus, don’t scatter
• ️ Think long term: buy and hold
• Don’t panic during dips—let compounding work
“You don’t need 100 stocks to succeed. You need a few excellent ones held with conviction.”
5. Mindset Mastery: Emotional Intelligence in Investing
More than strategy, investing requires mental strength:
• Patience over panic
• Acceptance of mistakes
• Independent thinking
• Resilience in down markets
Emotional control is often what separates average investors from successful ones.
6. Why Quality Companies Deserve a Premium
Good companies often look “expensive” — and that’s okay. Why?
• ✅ They grow consistently
• ✅ They produce strong cash flow
• ✅ They reinvest wisely
• ✅ They create long-term shareholder value
Smart investors know when to pay up for quality and when to wait.
7. Real-World Examples & Application
Luc mentions world-class examples like:
• LVMH (Luxury)
• Otis (Elevators)
• Zoetis (Animal health)
These companies meet nearly all his checklist points, making them models of what to look for.
Summary at a Glance:
Quality Investing- Focus on exceptional businesses
✅ Checklist Method - Blend of qualitative + quantitative filters
Financial Strength- ROIC, FCF, growth, low debt
Portfolio Strategy - Focused, long-term, low turnover
Investor Mindset- Patience, discipline, resilience
Valuation Awareness- Buy when fairly priced
Case Studies- Real-world application & clarity
✅ Final Thoughts
The Art of Quality Investing is not just a book—it’s a roadmap for thoughtful, long-term wealth building. Whether you’re just starting or refining your approach, this book arms you with clarity, discipline, and strategy.
Build Wealth by Owning World-Class Companies at Fair Prices
— by Luc Kroeze (Compounding Quality)
1. The Philosophy: What Is Quality Investing?
Luc Kroeze teaches that quality investing isn’t about chasing cheap stocks. It’s about buying exceptional companies with:
• Long-term advantages (moats)
• Strong leadership
• Healthy financials
• Global reach
“Don’t just buy what’s cheap. Own what lasts.”
Like Warren Buffett, the author believes it’s better to buy a great company at a fair price than a fair company at a great price.
2. Qualitative Checklist: What Makes a Company Truly Great?
Luc provides a practical quality checklist every investor should use:
• ✅ Simple and understandable business model
• ✅ Global or diversified customer base
• ✅ Strong pricing power and market dominance
• ✅ Sustainable growth & resilience in crises
• ✅ Skilled, ethical leadership (skin in the game)
✔️ If you can’t explain what the company does in 60 seconds, don’t invest.
3. Quantitative Filters: Numbers That Matter
A great company must also prove itself with numbers:
• Consistent growth in revenue and earnings
• High ROIC (Return on Invested Capital)
• Strong free cash flow
• Low debt and a healthy balance sheet
• Reasonable valuation (not overpriced)
These metrics show if a company can sustainably grow and reward shareholders.
️ 4. Portfolio Construction: Build with Purpose
Luc advises building a concentrated portfolio of 15–20 top-tier businesses, diversified across sectors. His approach:
• Focus, don’t scatter
• ️ Think long term: buy and hold
• Don’t panic during dips—let compounding work
“You don’t need 100 stocks to succeed. You need a few excellent ones held with conviction.”
5. Mindset Mastery: Emotional Intelligence in Investing
More than strategy, investing requires mental strength:
• Patience over panic
• Acceptance of mistakes
• Independent thinking
• Resilience in down markets
Emotional control is often what separates average investors from successful ones.
6. Why Quality Companies Deserve a Premium
Good companies often look “expensive” — and that’s okay. Why?
• ✅ They grow consistently
• ✅ They produce strong cash flow
• ✅ They reinvest wisely
• ✅ They create long-term shareholder value
Smart investors know when to pay up for quality and when to wait.
7. Real-World Examples & Application
Luc mentions world-class examples like:
• LVMH (Luxury)
• Otis (Elevators)
• Zoetis (Animal health)
These companies meet nearly all his checklist points, making them models of what to look for.
Summary at a Glance:
Quality Investing- Focus on exceptional businesses
✅ Checklist Method - Blend of qualitative + quantitative filters
Financial Strength- ROIC, FCF, growth, low debt
Portfolio Strategy - Focused, long-term, low turnover
Investor Mindset- Patience, discipline, resilience
Valuation Awareness- Buy when fairly priced
Case Studies- Real-world application & clarity
✅ Final Thoughts
The Art of Quality Investing is not just a book—it’s a roadmap for thoughtful, long-term wealth building. Whether you’re just starting or refining your approach, this book arms you with clarity, discipline, and strategy.