📖Duan Yongping
Quality Business Criteria
Quality businesses compound wealth and reduce risk.
Invest in businesses with durable competitive advantages, strong cash flows, and management integrity. Quality businesses compound wealth over time and reduce downside risk.
🏠 Everyday Analogy
📖 Core Interpretation
Duan Yongping emphasizes durable business quality over short-term noise. A strong model, real competitive edge, and disciplined capital allocation matter more than quarterly excitement.
💎 Key Insight：Durable advantages and good management create superior returns.
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❓ Why It Matters
Without business-quality filters, investors drift toward stories rather than economics. Durable cash generation is what supports long-term valuation.
🎯 How to Practice
Use a checklist covering moat, management, unit economics, and capital allocation; track long-term cash generation instead of quarter-to-quarter noise.
⚠️ Common Pitfalls
Buying narratives instead of cash-generating economics
Overreacting to short-term operating noise
Ignoring management quality and capital allocation
📚 Case Studies
1
NetEase Leadership Transition (2006)
Duan Yongping invested in NetEase, emphasizing Ding Lei’s integrity and long-term focus despite gaming regulatory uncertainty and past accounting concerns.
✨ Outcome：Management’s prudent capital allocation and product focus drove strong earnings growth and multibagger returns over the following decade.
2
BYD Executive Discipline (2010)
Duan Yongping sold or avoided BYD after observing governance and execution issues despite Warren Buffett’s investment and EV growth potential.
✨ Outcome：BYD stock became highly volatile; uneven profitability and governance worries validated Duan’s emphasis on management quality over popular narratives.
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