This book joins the list of some of the best books I have read. The authors are the two founders of AKO Capital in London along with Lawrence Cunningham who has written a lot of the books about Warren Buffet. AKO Capital manage around USD18 billion, they are based out of London and they follow a strict investment process of only investing in companies they perceive as “high quality.”
In almost every analyst note you read, the reports will discuss the financials of a particular business without going into much details about why a certain company is better than another operating in the same field. The authors use examples of companies they are looking at, some mistakes they have made in identifying quality companies and some pitfalls that occur in identifying a great company.
One of the key examples they look at is L’Oreal which many readers would know due to their prominence in the beauty industry. L’Oreal has been a fantastic performer over many years, significantly outperforming not only the wider market but also it’s peers.
On the flipside, they also give an example of the mistakes they made in thinking Tesco was a quality company which is particularly interesting given this is also a company which caught Warren Buffett off guard and ended up losing money on it.
It is a great book with factual detail and will change the way you look at companies versus their peers.
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