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High quality and high growth. Which one is more durable?
I find these two images quite interesting, especially when looked at at the same time.

This image shows that the probability of maintaining business quality over time is high. 70% of companies that had a greater than 25% ROIC in 2007 were able to maintain it throughout the next decade.


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The image below shows that the probability of maintaining high growth is low. Only 15% of companies that were growing at 15% rates were able to maintain that growth into the next decade:

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Moats are important but so are markets that allow for incremental growth to take advantage of this moat.

Leandro's avatar
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