Wonderful Company at Fair Price

Buying a wonderful company at a fair price puts business quality before bargain hunting while still respecting valuation. Buffett evolved from cheap cigar butts to this approach because time amplifies quality. A superior business can reinvest at attractive rates for many years. Even if entry is only fair rather than deeply distressed, compounding from business strength can dominate the final outcome.

Cheap assets with weak economics often deliver one valuation bounce and then stall. Investors who ignore quality can look right briefly and still underperform over full cycles. Long term wealth usually comes from businesses that improve intrinsic value year after year. If that engine is missing, low entry price alone rarely creates durable returns.

Separate analysis into two steps. First, test business quality: moat durability, return profile, management discipline, and cash resilience. Second, estimate a conservative fair value range and buy only when price is reasonable relative to that range. Hold long enough for business compounding to matter. The thesis should rely on value creation, not just multiple expansion.