Unsexy high-quality businesses yield 100-bagger returns
Long-term outperformance is driven by high-quality, often 'unsexy' companies that consistently reinvest capital and maintain strong moats rather than chasing short-term market trends.
The argument
The guest's study of 50 historical 100-baggers showed that high-quality stocks outperformed low-quality ones three-to-one over 35 years. Many of these winners resided in mundane industries like precision scales (Mettler Toledo) or niche retail (Tractor Supply).
The thesis, stress-tested
✓ What validates it
- ✓High-quality cohort outperforming low-quality benchmarks over multi-year periods
- ✓Sustained high return on invested capital (ROIC) in named companies
▸ Risks discussed
- ▸High valuation premiums for quality stocks
- ▸Inability of investors to withstand the short-term volatility required to achieve 100x returns
Hear it yourself
"That insight powers two active Victory shares ETFs. Modal, MODL, the Victory shares West End US sector ETF, a dynamic US large cap strategy that aligns its active sector allocation at avoidance with the economic cycle, and GLO, the Victory shares West End global equity ETF, which extends that same macro discipline across US sectors and international markets in a single ETF. Two funds, one proven process built to help investors manage risks and capture opportunities in an evolving macroeconomic landscape. Macro drives markets. West End knows macro."
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