Increasingly I have focused my attention on the "own forever" principle. By evaluating such a permanent commitment, I am forced to focus on "quality." Quality companies are distinguished by several factors: 1) a business model that is durable, 2) an industry that is durable, 3) a strong balance sheet and 4) a willingness to suffer by making long term investments in the business. Such companies make for wonderful investment marriages when combined with a reasonable price.
However my life is littered with a very different history. Having been trained in the school of Ben Graham, I have tended to look for that which is on sale. This excitement is the same as anyone might observe at a TJ Maxx. There is real pleasure in getting something that is genuinely needed at a significant discount. This warmth has a downside as the value is remembered long after the price is forgotten. By accumulating "sale price" goods, the investment portfolio is built of companies which grow slowly once the price has gotten to intrinsic value. The decision pathway becomes unattractive - either sell and pay taxes or keep and grow slowly. No good solution.
I'm finding that such a pathway towards quality and low turnover is also important in every other area of my life. First of all, as a veteran of two divorces, clearly there are a set of characteristics for a quality spouse. Second, in the area of employees, there are also characteristics that make for a quality employee. Third, in terms of selecting a client base, the same can be held true. The emphasis should be the same: pay attention to the drivers of low turnover and high quality while avoiding short term excitement.
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