Only the Best Will Do: The compelling case for investing in quality growth businesses by Peter Seilern

Part I: Why

Chapter 1: Higher Returns and
 Lower Risk

WHY IS A STRATEGY BASED ON FINDING AND HOLDING A PORTFOLIO OF
 quality growth businesses so attractive? As with any
 investment strategy, it ultimately comes down to balancing the
 two central elements of risk and return. Although the two are
 conventionally said to rise and fall in tandem, in reality it is not as
 straightforward as saying that more of one necessarily means more of the
 other. If it is possible to have an investment strategy which offers greater
 returns with below-average risk, any sensible investor, once aware of the
 possibility, would be foolish not to consider it. That, in a nutshell, is the
 happy combination which quality growth investing offers. History shows
 that it has consistently delivered those objectives for investors.
 Experience suggests that in practice most investors lack clarity about the
 need for a precise and considered strategy and are confused by the true
 meaning of risk. That is one reason why the returns they achieve are often
 disappointing. This includes professional as well as private investors. As is
 well known, over periods of more than five years, between 60% and 80% of
 professionally managed funds on average fail to beat an equivalent index
 fund or benchmark after accounting for fees on a consistent and durable
 basis.

Only the Best Will Do: The compelling case for investing in quality growth businesses by Peter Seilern