"Focus on Big Deals" Investment Strategy: Achieve Better Investment Returns by Concentrating on High-Quality Companies

“Focus on Big Deals” investment strategy stems from a simple yet profound insight: just like Didi drivers choose to focus on big orders instead of frequently accepting small ones, investors should

rather than frequently trading ordinary stocks. This analogy reveals the essence of value investment—quality over quantity, patience over frequency.

High-quality companies have the following characteristics:

• Strong economic moat
  : Has lasting competitive advantages such as brand effect, network effect, or cost advantage [1]
• Excellent financial performance
  : Sustained high ROE, stable cash flow, and healthy financial status
• Outstanding management
  : Has clear capital allocation strategy and shareholder interest orientation
• Reasonable valuation
  : Price has a margin of safety relative to intrinsic value

By analyzing the performance of three representative high-quality companies, we can see the effect of the strategy of focusing on high-quality companies:

1. Outstanding Return Performance
   :
   • Apple Inc.: 2020-2025 cumulative return rate 267.05% [0]
   • Microsoft Corp.: 199.86% return over the same period [0]
   • Kweichow Moutai: 27.05% return [0]
   • All significantly outperformed the S&P 500 index’s 107.15% return over the same period [0]

2. Excellent Financial Quality
   :
   • Apple net profit margin:26.92%, Microsoft:35.71%, Kweichow Moutai up to51.51% [0]
   • These companies demonstrate exceptional profitability and operational efficiency

3. Stable Market Position
   :
   • Apple market capitalization:4.02 trillion USD, Microsoft:3.54 trillion USD [0]
   • The huge market capitalization reflects the market’s recognition of their long-term value

Buffett emphasizes the importance of the “circle of competence” concept [1]. Investors should:

• Only invest in businesses and industries they understand
• Deeply research the company’s business model and competitive advantages
• Avoid chasing popular concepts they don’t understand

• Enjoy compound interest effect
  : Buffett’s famous saying is “Our favorite holding period is forever” [1]
• Reduce transaction costs
  : Avoid taxes and transaction costs from frequent buying and selling
• Reduce market noise interference
  : Focus on corporate fundamentals rather than short-term price fluctuations

• Intrinsic value assessment
  : Estimate the company’s true value through in-depth analysis
• Buy at a reasonable price
  : Wait for the market to offer opportunities below intrinsic value
• Risk control
  : Margin of safety provides downside protection for investments

1. Financial Health
   :
   • ROE >15%
   • Net profit margin >20%
   • Current ratio >1.5
   • Debt-to-equity ratio <2.0

2. Competitive Advantages
   :
   • Industry leader position
   • Stable market share
   • Strong brand value

3. Growth Potential
   :
   • Past 5-year revenue and profit compound growth rate
   • Future market space and growth drivers

• Concentrated investment
  : Hold 10-15 deeply researched high-quality stocks
• Appropriate diversification
  : Allocation across different industries and regions
• Regular revaluation
  : Quarterly or semi-annual fundamental tracking

1. Better long-term returns
   : Historical data shows high-quality companies significantly outperform market averages in long-term performance
2. Lower psychological pressure
   : Reduces anxiety from frequent decision-making and trading
3. Maximize compound interest effect
   : Long-term holding allows compound interest to play its maximum role
4. Relatively controllable risks
   : Quality companies usually have better risk resistance

1. Concentration risk
   : Excessive concentration may lead to high portfolio risk
2. Valuation risk
   : High-quality companies are usually valued highly, with callback risks
3. Opportunity cost
   : May miss some short-term hot opportunities

1. Start simple
   : Choose 1-2 well-known companies in familiar industries
2. Continuous learning
   : Deeply study financial statements and business models
3. Small-scale testing
   : Verify your judgments with small funds first

1. Build an investment list
   : Continuously track a list of high-quality companies under observation
2. Improve valuation system
   : Master multiple valuation methods and techniques
3. Optimize portfolio management
   : Dynamically adjust positions and rebalancing strategies

The “Focus on Big Deals” investment strategy is essentially a

. It emphasizes:

• Quality over quantity
  : Select a few high-quality companies instead of diversified investments
• Patience over frequency
  : Wait for the right opportunity instead of frequent trading
• In-depth research
  : Make decisions based on in-depth understanding rather than market hotspots

This strategy not only brings better long-term returns but also provides a better investment experience. Just as Didi drivers achieve a balance between income and life by focusing on big orders, investors can also achieve a win-win situation between wealth growth and mental health by focusing on high-quality companies.

Historical data proves that investors who truly adhere to this strategy can often maintain stability amid market fluctuations and ultimately obtain investment returns that exceed the average level [2]. This requires discipline, patience, and continuous learning, but the rewards are worth it.

[0] Gilin API Data - Stock Price and Financial Data
[1] Yushan Securities - Strategy Analysis of Value Investment Masters
[2] Finetic AI - The Way to Success of Buffett’s Value Investment