Vishal Khandelwal recently interviewed Guy Spier on his YouTube channel.
He asked Guy what his investment checklist would look like or what would Guy look at if he only had 5min to analyze a business.
Guy admits that he previously would look for high margins and returns, however he is now looking for something different.
Guy tells us how his father was recently hospitalized due to a bacterial joint infection. This made him realize how powerful bacteria is. Bacteria, once it has infected you, is hard to eradicate. They infect parts of the body with the least circulation , such as your joints, so as to shield away from the immune system, allowing the bacteria to multiply in peace.
So you want to invest in businesses that are like bacteria. These type of businesses, even though you can’t see it, are quietly spreading and becoming an integral part of the economy. Many distribution businesses are like this.
The issue with highly profitable businesses is that they present a target for competition. So rather look for businesses which are voluntarily reducing their profits in order to get things right. ( eg. Costco, Sherwin William Company, Pool Corp)