How quality investing behaves through the cycle

In part one of this series, we set out how we define quality: businesses that combine persistently high returns on capital with conservative balance sheets.  We also showed why that combination tends to persist - good companies generally stay good.  In this second article, we turn to what that persistence means in practice, and how quality businesses have tended to behave across different market environments. More positives, fewer negatives Quality persists partly because it is self-reinforcing. Management teams that allocate capital well tend to keep doing so, reinvesting where ...