The second is the quality of management, and the third is the reasonableness of valuation
So, I think these are the three important metrics The mindset is to own them with a long-term view We are buying businesses, and not stocks prices really And we are not getting affected by the day-to-day news as well
So, the whole point is that when we are looking at companies, we would like to invest in companies which have long runway available for growth, which are definitely having very strong moats, which will allow the companies to keep trading at premium valuations
We go for businesses which generally generate good cash flows And when it comes to quality of management, the capital allocation decision is what we monitor in detail We go back in history 5-10 years to look at how the managements have actually strategised in terms of their capital allocation,
which I think is a very important matrix and can lead to big success or failures in future