The best businesses can be too good to stay that way. Blessed with superb economics and seemingly-impregnable market positions, anyone would want to own their quality but for two recurring problems:
- Valuation – Unless the company or its sector is new (think Google-owner Alphabet on listing in 2004) or there is some kind of crisis (as Warren Buffett exploited with his American Express purchase in 1964) you must usually pay a generous multiple of future cashflows to buy the shares.
